⚠️💸 Ever blown up an account? I did. The #1 mistake? Not knowing your exact dollar risk *before* opening a trade. This isn't theoretical; it's survival. Here's how to know your maximum loss if your stop-loss hits.
Let's say you have a $1000 account, plan to use 10x leverage, and want to go long BTC at $60,000. First, define your stop-loss price. This is crucial! For our example, let's say you decide to stop loss if BTC hits $59,400 (a 1% move down).
Your Position Value = Account Equity × Leverage = $1000 × 10 = $10,000.
Your Position Size (in BTC) = Position Value / Entry Price = $10,000 / $60,000 = 0.1666 BTC.
Now, calculate your exact dollar risk:
Risk ($) = (Entry Price - Stop Loss Price) × Position Size
Risk ($) = ($60,000 - $59,400) × 0.1666
Risk ($) = $600 × 0.1666
Risk ($) =...
Let's say you have a $1000 account, plan to use 10x leverage, and want to go long BTC at $60,000. First, define your stop-loss price. This is crucial! For our example, let's say you decide to stop loss if BTC hits $59,400 (a 1% move down).
Your Position Value = Account Equity × Leverage = $1000 × 10 = $10,000.
Your Position Size (in BTC) = Position Value / Entry Price = $10,000 / $60,000 = 0.1666 BTC.
Now, calculate your exact dollar risk:
Risk ($) = (Entry Price - Stop Loss Price) × Position Size
Risk ($) = ($60,000 - $59,400) × 0.1666
Risk ($) = $600 × 0.1666
Risk ($) =...