Risk Management

If you read one section of this site before committing money, read this one. Most accounts are not destroyed by bad analysis — they are destroyed by position size, and that is a solvable problem.

The core arithmetic is unforgiving and worth memorising. A 50% loss requires a 100% gain to recover; a 60% loss requires 150%; an 80% loss requires 400%. That asymmetry is why avoiding large drawdowns matters more than capturing large gains, and why leverage is dangerous — it deepens losses to a depth from which recovery becomes mathematically implausible.

From that follows the practical approach: decide what percentage of your account you are willing to lose on a single position before you open it, place a stop where the idea is genuinely wrong rather than where the loss feels tolerable, and let those two facts determine the size. Our position size calculator does that arithmetic. Sizing from a stop distance instead of from conviction removes the emotional part of the decision, which is the part that fails under pressure.

One assumption to hold onto: a stop is not a guarantee. In fast crypto markets books thin out, prices gap, and a stop can fill well below where you placed it — so a real loss can exceed the figure any calculator gives you. Read slippage and liquidation.

We will not tell you what risk percentage to use; that depends on circumstances we cannot see. We will say that larger percentages shorten how long you survive a losing streak. Nothing here is financial advice.

Two further habits that cost nothing. Decide in advance what would make you exit a position for reasons other than price — a broken assumption, a change in the project, a rule change — because "it is down" is not information. And size positions on the assumption that several could go wrong at once: crypto assets correlate heavily in a selloff, so a portfolio of ten uncorrelated-looking ideas frequently behaves as one.