Most people size a trade by asking how much they can get on. That is backwards, and it is why two traders with the same idea get wildly different outcomes from it.
Three numbers, written down before the order goes in. They take about thirty seconds and they decide more than the entry does.
1. The money you are willing to lose
Not a percentage of a position. Not “a small one”. A number in currency, decided before you are emotionally attached to the idea.
One percent of the account per trade is a common starting point — common because it survives a losing streak. Ten losers in a row at 1% leaves you down about 10% and still trading. Ten in a row at 10% leaves you with roughly a third of what you started with and a problem that is no longer about trading.
2. The price that proves you wrong
Before entry, find the price where the reason you took the trade is no longer true. Not a round number, not a percentage you picked because it felt tolerable — the level that breaks the idea.
If you cannot find one, you do not have a trade. You have an opinion, and opinions do not come with an exit.
3. The size that connects them
size = (money you will risk) / (distance from entry to invalidation)Account $10,000. Risk 1%, so $100. Entry $18.40, and the idea is wrong below $17.35 — a distance of $1.05.
size = 100 / 1.05 = 95.2 -> 95 units
check: 95 x 1.05 = $99.75 at risk
value: 95 x 18.40 = $1,748 positionThe size is an output. You never picked it — the risk and the invalidation picked it for you. Move the stop further away and the size gets smaller on its own. That is the whole mechanism.
Why people do it backwards
Because size is the fun number. It is the one that decides whether the trade feels worth having on. So people pick the size first, then hunt for a stop that justifies it — which is how stops end up two ticks from entry on a position that needed room to breathe.
Pick the loss first and the size is arithmetic. Pick the size first and the loss is whatever the market decides.
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One more habit
If you write down a level at all, write both sides of it. “Above this, the idea is still alive. Below it, this other thing opens up.” A level with only one side is a prediction, and predictions do not tell you what to do when they are wrong.
Both free courses — crypto leverage and stock options — have a live position sizer built into them. Put your own numbers in and see what size falls out.
Education only. This is not financial advice and 360Trader is not a broker or an investment adviser. Nothing here is a recommendation to buy or sell anything. Trading involves risk, including the loss of your whole position.