Most traders choose a stop-loss after they pick a position size. Flip that order.
Your stop decides your size, not your confidence.
Hypothetical example: $5,000 account, 1% max risk = $50. You go long ETH at $2,550 with a stop at $2,450. That's $100 of risk per ETH, so your size is $50 ÷ $100 = 0.5 ETH.
If volatility forces a wider stop at $2,350 ($200 away), your size drops to 0.25 ETH. The risk stays $50, so the wider stop shrinks the position.
Takeaway: before every trade, write down your entry, your stop, and your maximum loss in dollars. If the size that result
s feels too small, the setup may not be worth taking.
What percentage of your account do you risk per trade?
#RiskManagement" #tradingeducation #cryptouniverseofficial #BinanceSquare
Your stop decides your size, not your confidence.
Hypothetical example: $5,000 account, 1% max risk = $50. You go long ETH at $2,550 with a stop at $2,450. That's $100 of risk per ETH, so your size is $50 ÷ $100 = 0.5 ETH.
If volatility forces a wider stop at $2,350 ($200 away), your size drops to 0.25 ETH. The risk stays $50, so the wider stop shrinks the position.
Takeaway: before every trade, write down your entry, your stop, and your maximum loss in dollars. If the size that result
s feels too small, the setup may not be worth taking.
What percentage of your account do you risk per trade?
#RiskManagement" #tradingeducation #cryptouniverseofficial #BinanceSquare