To implement this risk framework effectively, position size should always be determined by the exact distance between entry and stop-loss rather than arbitrary position sizing.
Simplified Math Formula
Instead of complicated equations, use this 3-step rule to find your position size:
Calculate Risk Amount ($): \text{Account Balance} \times \text{Risk \%}
Calculate Distance to Stop-Loss ($ / Token): {Entry Price} {Stop-Loss Price}
Calculate Number of NEAR Tokens: {Risk Amount} {Distance to Stop-Loss}
For a $10,000 portfolio with a 1.5% risk limit ($150 max loss):
$5.60 Breakout Setup: Buy at $5.65 with a $5.25 stop-loss ($0.40 risk per token). Position size is 375 $NEAR ($2,118.75 total capital). Target $6.45 for a $300 profit (2:1 reward-to-risk ratio).
$5.00 Retest Setup: Buy at $5.05 with a $4.75 stop-loss ($0.30 risk per token). Position size is 500 $NEAR ($2,525.00 total capital). Target $5.55 for a $250 profit (1.67:1 reward-to-risk ratio).
Quick Execution Checklist
Maximum Risk: Never risk more than $150 per trade on a $10k account.
Stop-Loss Rule: If the price hits your stop-loss, exit immediately—no exceptions.
Profit Taking: Move your stop-loss to your entry price once you reach 50% of your profit target to lock in a risk-free trade.
NEAR5.05-0.61%