Risk a small fixed share of the account per trade and size from your stop: size = account x risk% / stop distance.
Ask ten traders about their strategy and you'll hear about indicators, setups and entries. Ask how they size positions and most will shrug.
I was one of them. For my first two years I sized by feel: bigger when I was confident, bigger again after a loss to "make it back". My win rate was fine. My account wasn't.
#Why sizing beats entries
Two traders take the exact same trades. One risks 1% of the account per trade, the other risks 10%. After a run of eight losses, the first is down about 8%. The second is down about 57% and needs to more than double the remaining money just to get back to even.
Same skill. Opposite outcomes.
#The drawdown recovery table
| Loss | Gain needed to recover |
|---|---|
| 10% | 11% |
| 25% | 33% |
| 50% | 100% |
| 75% | 300% |
Losses compound against you. Small, survivable losses keep you in the game long enough for any real edge to show up.
#Fixed-fractional sizing in three steps
- Pick a risk per trade. 0.5% to 1% of the account is a sensible range for most people.
- Set your stop before you enter. The distance from entry to stop is your risk per unit.
- Divide. Position size = (account x risk %) / stop distance.
Example: a $10,000 account, 1% risk, a stop $2 away from entry. You can risk $100, so you buy 50 units.
As the account grows, positions grow. As it shrinks, they shrink. That is the opposite of martingale, and it is why fixed-fractional sizing survives losing streaks.
#Common mistakes
- Moving the stop to avoid a loss. This silently increases your risk per trade.
- Correlated positions. Five crypto longs at 1% each are closer to one 5% bet.
- Leverage as a goal. Leverage is a tool to reach your chosen size, not a reason to choose a bigger one.
#Test it on your own history
Upload a statement to the Bot X-ray. It shows how size changed after losses, your worst drawdown, and the chance your current sizing loses half the account when your own results are replayed in a different order.
Pin this above your screen
- Sizing decides survival. Entries decide style.
- Risk a small, fixed fraction per trade, and size from your stop.
- Treat correlated trades as one bigger trade.
Changes to this article
Oct 14, 2026: reviewed and updated. First published Oct 5, 2026. Spotted a mistake? Tell us, and we will fix it and note it here.
This is education and personal experience, not financial advice. Crypto and leveraged trading can lose you money fast. We may earn from sponsors shown on this page; they never edit our conclusions. How we make money.