Hello traders, how are you all?
What’s the one thing that separates traders from gamblers? Position sizing.
If you don’t know how much to risk on a trade, you’re not trading. You’re flipping coins and hoping for the best.
Position sizing is about how much capital you allocate to a single trade. It’s not about deciding whether to go in with 100% confidence or take a “small bet.” It’s the systematic calculation of risk per trade relative to your total portfolio, often based on your risk tolerance, stop-loss distance, and conviction level.
Position sizing determines whether one losing trade wipes you out—or just gives you a paper cut.
There isn’t a single person in crypto who doesn’t lose trades. Everyone loses. The difference between profitable and unprofitable traders is that profitable traders win big and lose small.
If you lose 50% of your portfolio, you need to make 100% just to break even.
Good position sizing ensures you stay in the game long enough for your edge to play out.
Small, consistent wins can scale over time when you’re not constantly trying to dig yourself out of a deep hole.
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2 Responses
Excellent reminders. Thanks.
Being a smaller trading account among some big ones, here at TTC, at times tempts me to stretch my 1% risk rule. Thanks for helping me focus on the fact that consistency is king.