How To Trade Crypto: Position Size

How To Trade Crypto: Position Size

Something that is almost never talked about when it comes to learning how to trade is how much to trade. Everyone tells you don’t invest more than you can afford to lose, but that’s no advice at all. We don’t invest to lose. If you really want to trade in a way that you don’t lose, you need to start thinking about trading with a rich mindset over a poor mindset. A poor person trades like they are trying to spend every penny on lottery tickets and strike it rich as fast as possible. Stop it. Just stop it. Rich traders conserve capital. How can you adjust after a bad trade when you are completely tapped out? It is recommended that all retail traders only put 2% of their capital at risk on a single trade. I personally never invest more than 1% on a single trade and most often only trade 0.05% on most trades. A 20th of 1%!! Think about that for a minute. How much of your portfolio did you put into your last trade? Was it 50% or 100%? If so you need to ask yourself … how soon do you want to lose all of your money. There is no way to adjust or modify, no way to find a better exit. Your hands are tied and you are left dealing with a lot of emotion. Emotion is the trader’s enemy. The two main reasons to take small positions is to manage emotion and to help you recover from a bad trade.


Every trade has risk. The smartest investors with the best set up can lose money because even a 99% chance of the perfect trade still has a 1% chance of it surprising you and putting that position on ice. If your position was perfect where you tried to enter, imagine how perfect it is at a 30% discount for example? If we can wait for a good setup again and a good discount, the odds of an even better trade is on the table. This makes a porfolio killing trade into a golden opportunity - all from taking the right position size. Implementing this single change in your trading will make you a better trader by far. It will also reduce stress and help you start investing/trading instead of making every trade a trip to the casino.

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