Position Sizing in Crypto: The One-Line Formula That Gets Traders Funded
Ask ten crypto traders how they choose their position size and most will say something like "usually 0.5 BTC" or "whatever feels right for the setup". That habit — sizing by feel instead of by formula — quietly ends more funded-account attempts than any bad strategy. The fix fits in one line of arithmetic. Let's build it properly for crypto futures.
The formula
Position size = (Risk per trade in USDT) / (Stop distance in USDT per unit)
Two numbers, one division. The discipline is in how honestly you produce each number.
Step 1: risk per trade, in money
Before the entry, decide how much you lose if the stop is hit. Not how much you want to make — how much you're willing to lose.
A practical ceiling for an evaluation or any serious account: 0.5–1% of the account per trade. With a daily loss limit of a few percent, this guarantees that even a streak of two or three stopped trades leaves you fully in the game.
Example: a 10,000 USDT account, risk 0.5% = 50 USDT per trade. This number is fixed before the trade and is not negotiable once you're in.
Step 2: stop distance, in money per unit
The stop goes where your setup is invalidated — beyond the level, beyond the swing, outside the range. Not "where it doesn't hurt": where the market proves you wrong.
Then compute what one unit loses over that distance. In linear USDT-margined futures the math is friendly: one unit of the base asset losing $500 of price costs you 500 USDT. Entry 64,000, stop 63,200 — the distance is 800 USDT per 1 BTC of position.
Step 3: divide
Size = 50 / 800 = 0.0625 BTC. Round down to your exchange's step — say 0.06 BTC.
Rounding down matters: 0.06 BTC risks 48 USDT (inside the plan), 0.07 risks 56 (plan broken). "Slightly over" is how evaluations actually end.
Leverage is a consequence, not a choice
Notice what never appeared in the formula: leverage. In crypto everyone asks "what leverage do you use?" — but leverage is just the margin you post against the size you already calculated. The dangerous habit is choosing leverage first ("20x feels right") and letting it dictate size. Professionals do the opposite: risk defines size, size defines margin, and the leverage number is whatever it happens to be.
What the formula buys you
- Volatility is priced in automatically. Wild day → wider stops → smaller size. Quiet day → tighter stops → bigger size. Dollar risk stays constant, which is exactly what a funded account requires.
- Position size becomes a variable, not an identity. Traders who always open "their usual size" are unknowingly risking triple on wide-stop days.
- Emotions lose their entry point. The size decision is made before the trade, by rule. There is nothing left to negotiate mid-trade — no doubling to "win it back", no adding "because it's working".
Common mistakes
- Sizing from the profit target. The formula starts from risk. Profit is a consequence of setup quality; risk is the only input you control.
- Moving the stop to fit a bigger size. The stop is defined by market structure. If the honest stop makes the size feel tiny, that's information about the setup, not a reason to redraw the stop.
- Ignoring fees and funding. On perpetuals, taker fees and funding payments eat into the risk budget — on short-distance trades noticeably. Include them.
Bottom line
A prop evaluation is, at its core, an exam in one habit: computing size from risk, every single trade, no exceptions. It takes ten seconds. Traders for whom those ten seconds became a reflex get funded. The rest keep trading "their usual size".
Binam funds crypto traders: accounts up to 100,000 USDT and up to 90% profit share. Pass the evaluation, trade the firm's capital. Details at binam.io.