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Onchain Economics

Position Size Calculator

Calculate the optimal position size based on your portfolio value, risk tolerance, and stop-loss level. Essential for managing risk in volatile crypto markets.

Portfolio & Risk

$
%

Max amount you're willing to lose: $200.00

Entry & Stop Loss

$
%
1 :

Recommended Position Size

$2,000

20.0% of your portfolio

Risk / Reward Summary

Max Loss (Risk)-$200.00
Potential Profit (Target)+$0.00
Risk : Reward1 : 2.0

Position Size at Different Stop Losses

5% stop loss
$4,000(40.0% of portfolio)
10% stop loss
$2,000(20.0% of portfolio)
15% stop loss
$1,333(13.3% of portfolio)
20% stop loss
$1,000(10.0% of portfolio)
30% stop loss
$666.67(6.7% of portfolio)

How Position Sizing Works

Position sizing determines how much of your portfolio to allocate to a single trade based on your risk tolerance. The goal is to limit your maximum loss to a predetermined percentage of your portfolio, regardless of how volatile the asset is.

The Formula

Position Size = (Portfolio × Risk %) ÷ Stop Loss Distance %

For example, with a $10,000 portfolio, 2% risk, and 10% stop loss:

Position Size = ($10,000 × 2%) ÷ 10% = $200 ÷ 0.10 = $2,000

This means you'd invest $2,000. If the price drops 10% (hitting your stop loss), you'd lose $200, which is exactly 2% of your portfolio.

Choosing Your Risk Percentage

  • 1% Rule (Conservative): Never risk more than 1% of your portfolio on a single trade. Recommended for beginners and during high volatility.
  • 2% Rule (Moderate): The most common position sizing rule. Allows reasonable position sizes while protecting against losing streaks.
  • 5% Rule (Aggressive): Higher risk per trade. Only recommended for experienced traders with high-conviction plays. A series of losses can significantly draw down your portfolio.

Why This Matters for Crypto

Crypto assets are significantly more volatile than traditional investments. Bitcoin regularly has 10-20% drawdowns, and altcoins can drop 30-50% in a single day. Without proper position sizing:

  • A single bad trade could wipe out weeks or months of gains
  • You might size positions based on emotion rather than logic
  • You can't survive a losing streak (even the best traders have them)

Risk/Reward Ratio

The risk/reward ratio compares your potential loss (stop loss) to your potential profit (take profit). A ratio of 1:2 means you expect to make twice as much on a winning trade as you'd lose on a losing one.

  • 1:1 — You need to be right more than 50% of the time to be profitable
  • 1:2 — You only need to be right 33% of the time to break even
  • 1:3 — You only need to be right 25% of the time to break even

Related Tools

Disclaimers

  • This calculator is for educational purposes and is not financial advice
  • Slippage, fees, and liquidation mechanics may cause actual losses to differ from calculated amounts
  • Stop-loss orders may not execute at exact prices during flash crashes or high volatility
  • Always practice proper risk management and never invest more than you can afford to lose