A brief on Position Sizing in Crypto

It's surprising how often traders, especially newer ones, overlook or misapply position sizing. In essence, it's about determining how much capital to allocate to a particular trade. This isn't just about how many $ADA you buy; it's fundamentally about managing risk on a per-trade basis.

A common approach involves defining a maximum percentage of your total account you're willing to risk on any single trade, often 1-2%. If your stop-loss dictates a 10% potential loss on an asset, and you're aiming for a 1% account risk, then your position size should be limited to 10% of your total account. So, for an account of $10,000, risking 1% ($100) means if $ADA moves against you by 10%, your position size should be $1,000 (10% of $10,000). This keeps you in the game longer, particularly during volatile periods like those $ADA has seen around the $0.17 mark.