| What you risk, in the account currency | — |
| Stop distance | — |
| Units to buy | — |
| Position value | — |
| Leverage needed | — |
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Position size is the size of a trade, in other words how many units of a coin or a share you buy. Many people decide it on a hunch, or always use the same amount. The trouble is that the same amount can hide very different risks. A hundred euros on a stock with a tight stop risk little, the same hundred euros with a distant stop risk a lot more.
Thinking the other way round changes everything. First you decide how much you are willing to lose if the trade goes wrong, then you choose where to put the stop by looking at the chart, and only at the end you work out the quantity. That way every trade weighs on the account in the same way, whatever the coin and whatever the stop distance.
Write the account capital and the percentage you want to risk on this trade. Many traders stay between 0.5% and 2%, but it is a choice that depends on you and on how much you can afford to lose. Then say whether you buy or sell short, the entry price and the stop price. The result tells you how much you would lose at the stop, how many units to buy and what the position is worth.
If the position value is higher than your capital, the calculator shows you the leverage you would need. It is information, not an invitation to use it. With leverage small moves are enough for fast losses, and when the market runs the stop can trigger at a worse price than the one written.
With a 10,000 euro account and a 1% risk you are willing to lose 100 euros. If you enter at 100 with the stop at 95, each unit loses 5 euros at the stop. So you buy 20 units, for a 2,000 euro position. It is an example to understand the calculation, not a result of STA.
Every STA card starts with entry, stop and target already set, which is why the stop distance is clear before you enter. If you want to understand how to choose the stop, read the guide to the stop loss.
Every card as soon as it closes, with the result and what STA learned from it. It's free and you don't need to sign up.
Follow the channelA DEMO account with virtual capital and real prices, the same cards as REAL users.
Try DEMO for free →This tool is for information only and is not investment advice. Trading crypto assets carries a high level of risk, including the loss of all the capital you use. The numerical examples are illustrative.
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