Position Sizing Guide
Learn how position sizing protects trading capital and reduces emotional decisions.
Risk budget comes first
Position size connects an account-level loss budget to a price level where an idea would be invalidated. For a linear USDT contract, quantity multiplied by the distance between entry and stop gives the price-only loss at that stop. Margin and risk budget are different numbers.
A worked position
An account of 1,000 USDT with a chosen 1% risk budget allows 10 USDT of price-only loss. With entry at 100 and stop at 95, each unit risks 5 USDT. Quantity is 10 / 5 = 2 units, with a 200 USDT entry notional.
Where estimates fall short
Fees, funding, slippage and a gap through the stop can increase the actual loss. Reduce quantity if these costs must fit within the same budget. Check exchange quantity steps before placing an order. A calculated quantity may need to be rounded down.
Work backward from a loss budget
Hypothetical worked example. With a hypothetical balance of 1,000 USDT and a 1% risk budget, planned price risk is 10 USDT. Entry 100 and stop 95 imply 5 USDT of price risk per unit, so quantity is 10/5 = 2 units. Notional is 200 USDT.
Is the planned loss guaranteed?
No. Fees, funding, gaps and slippage can make the realized loss larger. The calculator estimates a quantity from your inputs; it does not verify stop execution or the exchange’s minimum quantity.
Verify the assumptions
Check the input window, fees and data availability before applying this example. For the exact software behavior and coverage limits, read the scanner methodology. Examples explain arithmetic and interpretation; they are not historical performance claims.