The fastest way to blow up an account is not bad signals — it is bad sizing. A trader with a mediocre edge and great risk management will outlast a trader with a great edge and reckless sizing every time.
1. Risk a fixed percentage, not a fixed amount
The professional standard is to risk a small, fixed percentage of your account per trade — commonly 0.5%–2%.
Risk per trade = Account size × Risk %
If your account is $10,000 and you risk 1%, your maximum loss on any single trade is $100 — no matter how confident you feel.
2. Size from your stop, not your gut
Your position size is determined by the distance to your stop loss:
Position size = Risk per trade ÷ (Entry price − Stop price)
Example:
- Account: $10,000, risk 1% = $100
- Entry: $2,000 (ETH)
- Stop: $1,900 (distance = $100)
- Position size = $100 ÷ $100 = 1 ETH
A wider stop means a smaller position. This keeps your dollar risk constant regardless of volatility.
3. Scale size with signal quality
This is where a scoring system earns its keep. Instead of all-or-nothing, scale your risk to the TrendPilot score:
| Signal Score | Suggested risk |
|---|---|
| 6 (highest) | Full 1% |
| 5 | 0.75% |
| 4 | 0.5% |
| < 4 | Skip |
You take your largest positions on your highest-conviction, highest-scoring setups.
4. Respect total exposure
Per-trade risk is not enough. Cap your total open risk (e.g. no more than 4–6% across all positions at once) so a correlated market move can't take out the whole account.
Key takeaway
Decide how much you are willing to lose before you enter, size the position from your stop, and lean harder only on high-score signals. Survival first, profits second.
This article is educational and does not constitute financial advice. Trading crypto carries substantial risk. Historical performance does not guarantee future results.