Know your risk, know your position size! Calculate your trading position size according to your risk management.

Inputs Explained:

1. Trading Balance:

The “Trading Balance $” field refers to your trading portfolio. If you have a trading balance or trading portfolio of $1000, then your trading balance is $1000. (Trading balance does not include your leverage. It really only refers to what you actually own in your account!)

2. Stop Loss %

“Stop Loss %” refers to the stop loss that you determined for your trade. Example: If the price moves 2.5% against you, you want to be out of the trade, and your stop loss will be triggered at 2.5%. Your stop loss is 2.5%

3. Risk Level %

“Risk Level %” refers to how much % of your trading portfolio you are willing to lose, in case your stop loss gets hit. If your Risk Level is 1, then you only lose 1% of your portfolio when your stop loss gets hit.

Example: Your trading portfolio is $5000 and your risk level is 2, then you only lose $100 in case of losing the trade, as 2% of $5000 is $100.

4. Leverage

The leverage refers to the multiplier you choose on your crypto futures trading platform. If your Leverage is set to 1, you don’t borrow any money from the exchange. If your leverage is 5, your own capital is multiplied by 5 as you borrow money from the exchange. Leverage is a powerful, yet risky tool as it can multiply your gains by a lot while also multiplying your losses by a lot. In the case of a liquidation, you lose the whole margin that you used for the trade. We created this tool to save you from this worst-case scenario.

Calculated fields (Automatically calculated): 

Max Loss

Max Loss refers to how much money you lose in the trade, based on your inputs.

Total Position Size (with leverage)

This refers to your actual position size which is put into the market. This includes your margin, multiplied by the leverage you choose. If you use $100 of your own money with a leverage of 5x, your Total Position Size is $500. You use $400 of the exchange and $100 of your own capital as margin.

Required Margin

The required Margin is how much of your own money you use for the trade. If you use $20 of your own capital with 10x leverage, your Margin is $20 because that is the capital you need in order to open a Total Position Size of $200.

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