Risk management: calculate how much you could lose first, then decide how much to buy.
Suppose your trading account has 10,000 yuan and you plan to risk 100 yuan on a single trade. If the entry price is 5% above the stop-loss price, the approximate notional spot position would be 100 ÷ 5% = 2,000 yuan—not your entire account.
This is an educational example, not a recommendation to use a fixed percentage. Fees, slippage, and price gaps may cause actual losses to exceed your plan; a stop-loss does not guarantee that you will break even. You should also assess the combined risk of multiple highly correlated positions.
Position size should be worked out from your risk budget, not determined by how bullish you feel. #RiskManagement
Suppose your trading account has 10,000 yuan and you plan to risk 100 yuan on a single trade. If the entry price is 5% above the stop-loss price, the approximate notional spot position would be 100 ÷ 5% = 2,000 yuan—not your entire account.
This is an educational example, not a recommendation to use a fixed percentage. Fees, slippage, and price gaps may cause actual losses to exceed your plan; a stop-loss does not guarantee that you will break even. You should also assess the combined risk of multiple highly correlated positions.
Position size should be worked out from your risk budget, not determined by how bullish you feel. #RiskManagement