【First calculate how much you can afford to lose, then how much to buy】
Estimate spot position size: allowable loss amount ÷ stop-loss distance.
For example, with an account balance of 10,000 yuan, a risk budget of 50 yuan per trade, and a stop-loss distance of 5%, the position size would be about 1,000 yuan—not the full 10,000 yuan.
This is just an example, not a recommended allocation. Fees and slippage increase actual losses; in the event of a price gap or insufficient liquidity, a stop-loss order is not guaranteed to execute at the preset price.
Assess highly correlated positions together—don’t mistake exposure to the same risk for diversification.
#RiskManagement
Estimate spot position size: allowable loss amount ÷ stop-loss distance.
For example, with an account balance of 10,000 yuan, a risk budget of 50 yuan per trade, and a stop-loss distance of 5%, the position size would be about 1,000 yuan—not the full 10,000 yuan.
This is just an example, not a recommended allocation. Fees and slippage increase actual losses; in the event of a price gap or insufficient liquidity, a stop-loss order is not guaranteed to execute at the preset price.
Assess highly correlated positions together—don’t mistake exposure to the same risk for diversification.
#RiskManagement