Risk management in crypto currency, position size calculator for crypto currency,the most important part of trading strategy. Without it you risk losing all your equity. This calculator is a great tools for any new or expert crypto trader for example formula 1 crypto account size-this is the total USDT, bitcoin,erhereum or any other coins you use for trading.
2 Entry price-this is the limit price at which your trading tell you to go either long or short team.
3 stoploss price-this is the price of your first stop loss to get hit of the position if it goes against you if you don't know where stop loss should be it will show us how to determine your crypto stop loss.
4 maximum risk-this is the maximum risk in percentage that you are willing for each trade example risk between 0•5% and 1•5%.strategy, 0•5%-1•5% will keep your equity safe from the high volatility of the crypto market. Let's see example below for long position for BTC/USDT.
Account size,1000 USDT
Entry price, 30,000 USDT
Stop loss price, 28,000 USDT
Max risk %,1•5%
(1000×(1•5×0•1))/(30,000-28,000)×30,000=225 USDT
Let's take it apart,
Account size(max risk %×0•1))(1000×(1•5×0•1))=15 USDT, this is the maximum amount that we are willing to risk on the trade.
(Entry price-stop loss price) (30,000-28,000)=2000 USDT,2000 USDT is -this is the amount we would loss if our stoploss was hit and we had bought a full BTC.
(Account size(max risk %×0•01))/(entry price-stoploss price)
15/2000=0•0075 this is the only amount of BTC that you should buy in order to only lose 15 USDT (1•5%of your account size) if your trade hits the stoploss.
Account size (max risk %×0•01))/(entry price -stoploss price)×entry price 0•0075×30,000=225 USD multiplied by the amount of BTC you want to buy.
Here is the source
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