【Calculate the potential loss first, then set your position size】
Assume you have an account of 10,000 yuan and are willing to lose at most 100 yuan on a trade. If the entry price is 5% away from the stop-loss price, the maximum position size before fees would be about 100 ÷ 5% = 2,000 yuan.
This is an example of spot trading without leverage, not a recommended percentage. Fees and slippage can increase losses, so leave a buffer. In the event of a price gap or insufficient liquidity, a stop-loss order is not guaranteed to execute at the set price.
First determine your invalidation conditions and risk budget, then decide how much to buy. Don’t replace calculations with “it feels safe.”
#RiskManagement
Assume you have an account of 10,000 yuan and are willing to lose at most 100 yuan on a trade. If the entry price is 5% away from the stop-loss price, the maximum position size before fees would be about 100 ÷ 5% = 2,000 yuan.
This is an example of spot trading without leverage, not a recommended percentage. Fees and slippage can increase losses, so leave a buffer. In the event of a price gap or insufficient liquidity, a stop-loss order is not guaranteed to execute at the set price.
First determine your invalidation conditions and risk budget, then decide how much to buy. Don’t replace calculations with “it feels safe.”
#RiskManagement