Calculation of position size for entry Entry = $0.072, Stop = $0.068 (difference $0.004)
Coin quantity formula
\[
\text{Qty} = \frac{\text{Risk\$}}{\text{Entry - Stop}}
\]
Position cost formula
\[
\text{Position\$} = \text{Qty} \cdot \text{Entry}
\]
---
Results at 1% capital risk
| Balance | Risk 1% ($) | Qty OM | Position $ | % of capital |
|---:|---:|---:|---:|---:|
| $100 | $1.00 | 250 | $18.00 | 18% |
| $500 | $5.00 | 1,250 | $90.00 | 18% |
| $1,000 | $10.00 | 2,500 | $180.00 | 18% |
---
Results at 2% risk of capital (alternative)
| Balance | Risk 2% ($) | Qty OM | Position $ | % of capital |
|---:|---:|---:|---:|---:|
| $100 | $2.00 | 500 | $36.00 | 36% |
| $500 | $10.00 | 2,500 | $180.00 | 36% |
| $1,000 | $20.00 | 5,000 | $360.00 | 36% |
---
- The position becomes large (18%–36% of capital) at the specified stop; this is normal for a low asset price, but check margin requirements and slippage on the exchange.
- If you want to reduce exposure, increase the stop (wider, but fewer coins) or reduce the risk %.
- When using leverage, consider that the actual risk and margin requirements will change.
S. B. - "POINT OF REFERENCE"
