Give each output its own unit
Account risk is a chosen percentage used in a planning calculation. Multiplying the account value by that percentage produces a monetary budget. Dividing the budget by an entry-to-stop distance produces asset units; multiplying units by entry gives notional exposure.
These quantities are related, but they are not interchangeable. A $100 modeled budget does not mean a position costs $100, and a $2,000 notional does not mean the planned stop loss is $2,000. State which quantity a percentage refers to.
Evidence: CryptoTrades position size calculator
Reproduce the baseline before comparing percentages
For a fictional $10,000 account, a 1% risk input gives a $100 budget. At a $100 long entry and $95 stop, the distance is $5, quantity is 20 units and notional is $2,000.
That notional is 20% of the hypothetical account, while the modeled loss budget is 1%. The denominator is the same account value, but the numerator is different. Neither percentage is a recommended allocation or a statement of possible maximum loss.
| Measure | Calculation | Result |
|---|---|---|
| Budget | $10,000 × 1% | $100 |
| Units | $100 ÷ $5 | 20 |
| Notional | 20 × $100 | $2,000 |
| Notional / account | $2,000 ÷ $10,000 | 20% |
Change distance while holding the budget fixed
With the same account, percentage and entry but a $99 stop, the distance is $1. The formula returns 100 units and $10,000 of notional: 100% of the account despite the same 1% modeled budget.
At a $99.50 stop, it returns 200 units and $20,000 of notional. The tool flags that exposure exceeds the account balance. It does not impose a cash-only size cap, arrange financing or determine whether an actual order would be possible.
Evidence: CryptoTrades position size calculator
Stress exposure without calling it a forecast
For those 200 hypothetical units, an exit at $99 rather than the assumed $99.50 implies a $200 price loss before costs. The extra half-dollar per unit doubles the original $100 budget in that invented case.
This is a sensitivity check, not a model of volatility or typical execution. A smaller distance changes calculated quantity; it provides no evidence of a lower chance of loss. Fees and other costs still need a separate assessment.
A collection of budgets is not a portfolio risk model
Adding three $100 modeled budgets gives $300 under their individual assumptions. It does not establish a reliable maximum loss for the account, especially when several assets or positions respond to the same event.
The position tool does not estimate correlations, price paths or simultaneous execution failures. A manual holdings tracker provides a different snapshot of entered values, not a substitute for a portfolio risk model.
Read both budget and notional every time
When using the tool, keep direction, account definition, currency, entry and stop with the result. Check the warning state rather than copying only the unit quantity. Use invented values if you simply want to understand the relationship.
For a short scenario, apply the supported direction rules and recognize the additional borrowing and liquidation questions the model excludes. Do not translate a percentage into an assurance about loss, suitability or the amount you should deploy.
Sources & method
- CryptoTrades position size calculator
Formula, supported direction and validation checked against the current implementation. No exchange orders were placed. Checked 2026-10-28.
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