MaxMaraUkraine

@Vanarchain $VANRY #Vanar Loss-based position sizing means that the size of each trade is calculated based on the maximum possible loss. In other words, before trading, you determine the maximum possible loss and then decide the size of your trades based on that loss.
In my trading system, I believe that minimizing risk is more important than maximizing profit, as being able to maintain long-term net profitability requires that the capital does not have significant drawdowns. Based on this, I continuously work on improving the win rate and the profit-to-loss ratio to achieve the goal of maximizing profit.
Assuming my total capital is 10000 yuan, I set my maximum loss limit for a single quarter at 10%, which means a maximum loss amount of 1000 yuan. I can divide this 1000 yuan into 10 parts, each part being 100 yuan, which serves as my maximum loss per single trade. From a psychological perspective, keeping the single trade loss between 1% and 2% of the total capital can help maintain a good trading mindset.
After determining the maximum loss per trade, you can then determine the entry point and stop loss point for the selected asset, which allows you to calculate the stop loss ratio (once the entry point is set, you can also estimate the profit-loss ratio, which I believe should generally be greater than 1.5 to consider opening a position).
Position size = Maximum loss per trade / Stop loss ratio.
For example, if the maximum loss per trade is 100 yuan and the stop loss ratio is 5%, then 100 / 0.05 = 2000 yuan, which calculates the position size for this trade. With a principal of 10,000 yuan, this position is equivalent to 20% of the capital.
If this trade eventually makes a profit, add half of the earned money to the maximum loss amount for the quarter, which serves both to snowball profits and to lock in some of the gains.
Then at the beginning of each quarter, all funds are recalculated.
Using the method of determining position based on loss, you will find the benefits:
The first benefit is that your per trade loss is predetermined, so if you want to improve profitability, you can only try to reduce the stop loss ratio as much as possible when opening a position, which means increasing the profit-loss ratio. Entering at more appropriate points rather than opening positions blindly.
Because if the stop loss ratio is too large, the position will inevitably be lighter, making the risk-reward ratio not worthwhile. This prompts your trading system to continuously optimize entry points; if the position is not suitable, it’s better not to enter than to act blindly.
The second benefit is that for assets with different volatilities, the risk tolerance is the same. For example, a highly volatile altcoin and the relatively less volatile S&P 500 index both have the same maximum loss per trade, so the position for the asset with lower volatility will inevitably be larger, while the position for the asset with higher volatility will be relatively smaller.
This is also applicable to contract trading; just include the leverage in the formula. Assuming the maximum loss per trade is still 100 yuan, leverage is 2 times, and stop loss ratio is 5%, then position size = maximum loss per trade / leverage / stop loss ratio = 100 / 2 / 0.05 = 1000 yuan. You will find that the higher the leverage, the smaller the position size. Yes, I never use high leverage because I prioritize thinking about trading from the perspective of maximum loss.
Let's talk about the practical considerations of determining position based on loss:
First, the focus of trading should shift to improving win rates and profit-loss ratios, rather than blindly pursuing large positions and low stop loss ratios.
Assuming the stop loss ratio is only 2%, but the win rate is only 1/10, meaning that out of 10 trades, 9 hit the stop loss, even though the per trade loss is fixed, the total loss remains large. It’s akin to betting that one of those trades will yield a very high profit-loss ratio. Moreover, this method will frequently hit stop losses, which can have a significant psychological impact on trading.
Second, what to do if there are multiple consecutive losses in a single quarter? One way is to actively reduce your trading frequency and review the reasons for low win rates in past trades; another way is to divide the remaining loss amount more finely, reducing the maximum loss per trade, allowing for more trading opportunities (though the corresponding position size will also decrease).
Third, what if the maximum loss amount for a single quarter is exhausted? My suggestion is to temporarily leave the market, focus on improving internal skills, enhance your understanding and trading system, review past trades, read books, or take a break to change your mood. Re-enter the market in the next quarter. Sometimes choosing not to trade is much better than trading.
Fourth, the maximum loss for a single quarter, whether this period is a single quarter, a single month, or half a year, is determined by each person's trading habits. In general, the larger the time period, the maximum loss ratio can be increased, and vice versa.
All the above parameters can be flexibly adjusted; the key is to find parameters that align with your trading habits and rhythm, and then execute them decisively.

@Walrus 🦭/acc $WAL $WAL #walrus Loss-based position sizing means that the size of each trade is calculated based on the maximum possible loss. In other words, before trading, you determine the maximum possible loss and then decide the size of your trades based on that loss.
In my trading system, I believe that minimizing risk is more important than maximizing profit, as being able to maintain long-term net profitability requires that the capital does not have significant drawdowns. Based on this, I continuously work on improving the win rate and the profit-to-loss ratio to achieve the goal of maximizing profit.
Assuming my total capital is 10000 yuan, I set my maximum loss limit for a single quarter at 10%, which means a maximum loss amount of 1000 yuan. I can divide this 1000 yuan into 10 parts, each part being 100 yuan, which serves as my maximum loss per single trade. From a psychological perspective, keeping the single trade loss between 1% and 2% of the total capital can help maintain a good trading mindset.
After determining the maximum loss per trade, you can then determine the entry point and stop loss point for the selected asset, which allows you to calculate the stop loss ratio (once the entry point is set, you can also estimate the profit-loss ratio, which I believe should generally be greater than 1.5 to consider opening a position).
Position size = Maximum loss per trade / Stop loss ratio.
For example, if the maximum loss per trade is 100 yuan and the stop loss ratio is 5%, then 100 / 0.05 = 2000 yuan, which calculates the position size for this trade. With a principal of 10,000 yuan, this position is equivalent to 20% of the capital.
If this trade eventually makes a profit, add half of the earned money to the maximum loss amount for the quarter, which serves both to snowball profits and to lock in some of the gains.
Then at the beginning of each quarter, all funds are recalculated.
Using the method of determining position based on loss, you will find the benefits:
The first benefit is that your per trade loss is predetermined, so if you want to improve profitability, you can only try to reduce the stop loss ratio as much as possible when opening a position, which means increasing the profit-loss ratio. Entering at more appropriate points rather than opening positions blindly.
Because if the stop loss ratio is too large, the position will inevitably be lighter, making the risk-reward ratio not worthwhile. This prompts your trading system to continuously optimize entry points; if the position is not suitable, it’s better not to enter than to act blindly.
The second benefit is that for assets with different volatilities, the risk tolerance is the same. For example, a highly volatile altcoin and the relatively less volatile S&P 500 index both have the same maximum loss per trade, so the position for the asset with lower volatility will inevitably be larger, while the position for the asset with higher volatility will be relatively smaller.
This is also applicable to contract trading; just include the leverage in the formula. Assuming the maximum loss per trade is still 100 yuan, leverage is 2 times, and stop loss ratio is 5%, then position size = maximum loss per trade / leverage / stop loss ratio = 100 / 2 / 0.05 = 1000 yuan. You will find that the higher the leverage, the smaller the position size. Yes, I never use high leverage because I prioritize thinking about trading from the perspective of maximum loss.
Let's talk about the practical considerations of determining position based on loss:
First, the focus of trading should shift to improving win rates and profit-loss ratios, rather than blindly pursuing large positions and low stop loss ratios.
Assuming the stop loss ratio is only 2%, but the win rate is only 1/10, meaning that out of 10 trades, 9 hit the stop loss, even though the per trade loss is fixed, the total loss remains large. It’s akin to betting that one of those trades will yield a very high profit-loss ratio. Moreover, this method will frequently hit stop losses, which can have a significant psychological impact on trading.
Second, what to do if there are multiple consecutive losses in a single quarter? One way is to actively reduce your trading frequency and review the reasons for low win rates in past trades; another way is to divide the remaining loss amount more finely, reducing the maximum loss per trade, allowing for more trading opportunities (though the corresponding position size will also decrease).
Third, what if the maximum loss amount for a single quarter is exhausted? My suggestion is to temporarily leave the market, focus on improving internal skills, enhance your understanding and trading system, review past trades, read books, or take a break to change your mood. Re-enter the market in the next quarter. Sometimes choosing not to trade is much better than trading.
Fourth, the maximum loss for a single quarter, whether this period is a single quarter, a single month, or half a year, is determined by each person's trading habits. In general, the larger the time period, the maximum loss ratio can be increased, and vice versa.
All the above parameters can be flexibly adjusted; the key is to find parameters that align with your trading habits and rhythm, and then execute them decisively.

@Dusk $DUSK #Dusk Loss-based position sizing means that the size of each trade is calculated based on the maximum possible loss. In other words, before trading, you determine the maximum possible loss and then decide the size of your trades based on that loss.
In my trading system, I believe that minimizing risk is more important than maximizing profit, as being able to maintain long-term net profitability requires that the capital does not have significant drawdowns. Based on this, I continuously work on improving the win rate and the profit-to-loss ratio to achieve the goal of maximizing profit.
Assuming my total capital is 10000 yuan, I set my maximum loss limit for a single quarter at 10%, which means a maximum loss amount of 1000 yuan. I can divide this 1000 yuan into 10 parts, each part being 100 yuan, which serves as my maximum loss per single trade. From a psychological perspective, keeping the single trade loss between 1% and 2% of the total capital can help maintain a good trading mindset.
After determining the maximum loss per trade, you can then determine the entry point and stop loss point for the selected asset, which allows you to calculate the stop loss ratio (once the entry point is set, you can also estimate the profit-loss ratio, which I believe should generally be greater than 1.5 to consider opening a position).
Position size = Maximum loss per trade / Stop loss ratio.
For example, if the maximum loss per trade is 100 yuan and the stop loss ratio is 5%, then 100 / 0.05 = 2000 yuan, which calculates the position size for this trade. With a principal of 10,000 yuan, this position is equivalent to 20% of the capital.
If this trade eventually makes a profit, add half of the earned money to the maximum loss amount for the quarter, which serves both to snowball profits and to lock in some of the gains.
Then at the beginning of each quarter, all funds are recalculated.
Using the method of determining position based on loss, you will find the benefits:
The first benefit is that your per trade loss is predetermined, so if you want to improve profitability, you can only try to reduce the stop loss ratio as much as possible when opening a position, which means increasing the profit-loss ratio. Entering at more appropriate points rather than opening positions blindly.
Because if the stop loss ratio is too large, the position will inevitably be lighter, making the risk-reward ratio not worthwhile. This prompts your trading system to continuously optimize entry points; if the position is not suitable, it’s better not to enter than to act blindly.
The second benefit is that for assets with different volatilities, the risk tolerance is the same. For example, a highly volatile altcoin and the relatively less volatile S&P 500 index both have the same maximum loss per trade, so the position for the asset with lower volatility will inevitably be larger, while the position for the asset with higher volatility will be relatively smaller.
This is also applicable to contract trading; just include the leverage in the formula. Assuming the maximum loss per trade is still 100 yuan, leverage is 2 times, and stop loss ratio is 5%, then position size = maximum loss per trade / leverage / stop loss ratio = 100 / 2 / 0.05 = 1000 yuan. You will find that the higher the leverage, the smaller the position size. Yes, I never use high leverage because I prioritize thinking about trading from the perspective of maximum loss.
Let's talk about the practical considerations of determining position based on loss:
First, the focus of trading should shift to improving win rates and profit-loss ratios, rather than blindly pursuing large positions and low stop loss ratios.
Assuming the stop loss ratio is only 2%, but the win rate is only 1/10, meaning that out of 10 trades, 9 hit the stop loss, even though the per trade loss is fixed, the total loss remains large. It’s akin to betting that one of those trades will yield a very high profit-loss ratio. Moreover, this method will frequently hit stop losses, which can have a significant psychological impact on trading.
Second, what to do if there are multiple consecutive losses in a single quarter? One way is to actively reduce your trading frequency and review the reasons for low win rates in past trades; another way is to divide the remaining loss amount more finely, reducing the maximum loss per trade, allowing for more trading opportunities (though the corresponding position size will also decrease).
Third, what if the maximum loss amount for a single quarter is exhausted? My suggestion is to temporarily leave the market, focus on improving internal skills, enhance your understanding and trading system, review past trades, read books, or take a break to change your mood. Re-enter the market in the next quarter. Sometimes choosing not to trade is much better than trading.
Fourth, the maximum loss for a single quarter, whether this period is a single quarter, a single month, or half a year, is determined by each person's trading habits. In general, the larger the time period, the maximum loss ratio can be increased, and vice versa.
All the above parameters can be flexibly adjusted; the key is to find parameters that align with your trading habits and rhythm, and then execute them decisively.

@Plasma $XPL #plasma $XPL Loss-based position sizing means that the size of each trade is calculated based on the maximum possible loss. In other words, before trading, you determine the maximum possible loss and then decide the size of your trades based on that loss.
In my trading system, I believe that minimizing risk is more important than maximizing profit, as being able to maintain long-term net profitability requires that the capital does not have significant drawdowns. Based on this, I continuously work on improving the win rate and the profit-to-loss ratio to achieve the goal of maximizing profit.
Assuming my total capital is 10000 yuan, I set my maximum loss limit for a single quarter at 10%, which means a maximum loss amount of 1000 yuan. I can divide this 1000 yuan into 10 parts, each part being 100 yuan, which serves as my maximum loss per single trade. From a psychological perspective, keeping the single trade loss between 1% and 2% of the total capital can help maintain a good trading mindset.
After determining the maximum loss per trade, you can then determine the entry point and stop loss point for the selected asset, which allows you to calculate the stop loss ratio (once the entry point is set, you can also estimate the profit-loss ratio, which I believe should generally be greater than 1.5 to consider opening a position).
Position size = Maximum loss per trade / Stop loss ratio.
For example, if the maximum loss per trade is 100 yuan and the stop loss ratio is 5%, then 100 / 0.05 = 2000 yuan, which calculates the position size for this trade. With a principal of 10,000 yuan, this position is equivalent to 20% of the capital.
If this trade eventually makes a profit, add half of the earned money to the maximum loss amount for the quarter, which serves both to snowball profits and to lock in some of the gains.
Then at the beginning of each quarter, all funds are recalculated.
Using the method of determining position based on loss, you will find the benefits:
The first benefit is that your per trade loss is predetermined, so if you want to improve profitability, you can only try to reduce the stop loss ratio as much as possible when opening a position, which means increasing the profit-loss ratio. Entering at more appropriate points rather than opening positions blindly.
Because if the stop loss ratio is too large, the position will inevitably be lighter, making the risk-reward ratio not worthwhile. This prompts your trading system to continuously optimize entry points; if the position is not suitable, it’s better not to enter than to act blindly.
The second benefit is that for assets with different volatilities, the risk tolerance is the same. For example, a highly volatile altcoin and the relatively less volatile S&P 500 index both have the same maximum loss per trade, so the position for the asset with lower volatility will inevitably be larger, while the position for the asset with higher volatility will be relatively smaller.
This is also applicable to contract trading; just include the leverage in the formula. Assuming the maximum loss per trade is still 100 yuan, leverage is 2 times, and stop loss ratio is 5%, then position size = maximum loss per trade / leverage / stop loss ratio = 100 / 2 / 0.05 = 1000 yuan. You will find that the higher the leverage, the smaller the position size. Yes, I never use high leverage because I prioritize thinking about trading from the perspective of maximum loss.
Let's talk about the practical considerations of determining position based on loss:
First, the focus of trading should shift to improving win rates and profit-loss ratios, rather than blindly pursuing large positions and low stop loss ratios.
Assuming the stop loss ratio is only 2%, but the win rate is only 1/10, meaning that out of 10 trades, 9 hit the stop loss, even though the per trade loss is fixed, the total loss remains large. It’s akin to betting that one of those trades will yield a very high profit-loss ratio. Moreover, this method will frequently hit stop losses, which can have a significant psychological impact on trading.
Second, what to do if there are multiple consecutive losses in a single quarter? One way is to actively reduce your trading frequency and review the reasons for low win rates in past trades; another way is to divide the remaining loss amount more finely, reducing the maximum loss per trade, allowing for more trading opportunities (though the corresponding position size will also decrease).
Third, what if the maximum loss amount for a single quarter is exhausted? My suggestion is to temporarily leave the market, focus on improving internal skills, enhance your understanding and trading system, review past trades, read books, or take a break to change your mood. Re-enter the market in the next quarter. Sometimes choosing not to trade is much better than trading.
Fourth, the maximum loss for a single quarter, whether this period is a single quarter, a single month, or half a year, is determined by each person's trading habits. In general, the larger the time period, the maximum loss ratio can be increased, and vice versa.
All the above parameters can be flexibly adjusted; the key is to find parameters that align with your trading habits and rhythm, and then execute them decisively.

@Vanarchain $VANRY #Vanar Loss-based position sizing means that the size of each trade is calculated based on the maximum possible loss. In other words, before trading, you determine the maximum possible loss and then decide the size of your trades based on that loss.
In my trading system, I believe that minimizing risk is more important than maximizing profit, as being able to maintain long-term net profitability requires that the capital does not have significant drawdowns. Based on this, I continuously work on improving the win rate and the profit-to-loss ratio to achieve the goal of maximizing profit.
Assuming my total capital is 10000 yuan, I set my maximum loss limit for a single quarter at 10%, which means a maximum loss amount of 1000 yuan. I can divide this 1000 yuan into 10 parts, each part being 100 yuan, which serves as my maximum loss per single trade. From a psychological perspective, keeping the single trade loss between 1% and 2% of the total capital can help maintain a good trading mindset.
After determining the maximum loss per trade, you can then determine the entry point and stop loss point for the selected asset, which allows you to calculate the stop loss ratio (once the entry point is set, you can also estimate the profit-loss ratio, which I believe should generally be greater than 1.5 to consider opening a position).
Position size = Maximum loss per trade / Stop loss ratio.
For example, if the maximum loss per trade is 100 yuan and the stop loss ratio is 5%, then 100 / 0.05 = 2000 yuan, which calculates the position size for this trade. With a principal of 10,000 yuan, this position is equivalent to 20% of the capital.
If this trade eventually makes a profit, add half of the earned money to the maximum loss amount for the quarter, which serves both to snowball profits and to lock in some of the gains.
Then at the beginning of each quarter, all funds are recalculated.
Using the method of determining position based on loss, you will find the benefits:
The first benefit is that your per trade loss is predetermined, so if you want to improve profitability, you can only try to reduce the stop loss ratio as much as possible when opening a position, which means increasing the profit-loss ratio. Entering at more appropriate points rather than opening positions blindly.
Because if the stop loss ratio is too large, the position will inevitably be lighter, making the risk-reward ratio not worthwhile. This prompts your trading system to continuously optimize entry points; if the position is not suitable, it’s better not to enter than to act blindly.
The second benefit is that for assets with different volatilities, the risk tolerance is the same. For example, a highly volatile altcoin and the relatively less volatile S&P 500 index both have the same maximum loss per trade, so the position for the asset with lower volatility will inevitably be larger, while the position for the asset with higher volatility will be relatively smaller.
This is also applicable to contract trading; just include the leverage in the formula. Assuming the maximum loss per trade is still 100 yuan, leverage is 2 times, and stop loss ratio is 5%, then position size = maximum loss per trade / leverage / stop loss ratio = 100 / 2 / 0.05 = 1000 yuan. You will find that the higher the leverage, the smaller the position size. Yes, I never use high leverage because I prioritize thinking about trading from the perspective of maximum loss.
Let's talk about the practical considerations of determining position based on loss:
First, the focus of trading should shift to improving win rates and profit-loss ratios, rather than blindly pursuing large positions and low stop loss ratios.
Assuming the stop loss ratio is only 2%, but the win rate is only 1/10, meaning that out of 10 trades, 9 hit the stop loss, even though the per trade loss is fixed, the total loss remains large. It’s akin to betting that one of those trades will yield a very high profit-loss ratio. Moreover, this method will frequently hit stop losses, which can have a significant psychological impact on trading.
Second, what to do if there are multiple consecutive losses in a single quarter? One way is to actively reduce your trading frequency and review the reasons for low win rates in past trades; another way is to divide the remaining loss amount more finely, reducing the maximum loss per trade, allowing for more trading opportunities (though the corresponding position size will also decrease).
Third, what if the maximum loss amount for a single quarter is exhausted? My suggestion is to temporarily leave the market, focus on improving internal skills, enhance your understanding and trading system, review past trades, read books, or take a break to change your mood. Re-enter the market in the next quarter. Sometimes choosing not to trade is much better than trading.
Fourth, the maximum loss for a single quarter, whether this period is a single quarter, a single month, or half a year, is determined by each person's trading habits. In general, the larger the time period, the maximum loss ratio can be increased, and vice versa.
All the above parameters can be flexibly adjusted; the key is to find parameters that align with your trading habits and rhythm, and then execute them decisively.

@Plasma $XPL #plasma $XPL Loss-based position sizing means that the size of each trade is calculated based on the maximum possible loss. In other words, before trading, you determine the maximum possible loss and then decide the size of your trades based on that loss.
In my trading system, I believe that minimizing risk is more important than maximizing profit, as being able to maintain long-term net profitability requires that the capital does not have significant drawdowns. Based on this, I continuously work on improving the win rate and the profit-to-loss ratio to achieve the goal of maximizing profit.
Assuming my total capital is 10000 yuan, I set my maximum loss limit for a single quarter at 10%, which means a maximum loss amount of 1000 yuan. I can divide this 1000 yuan into 10 parts, each part being 100 yuan, which serves as my maximum loss per single trade. From a psychological perspective, keeping the single trade loss between 1% and 2% of the total capital can help maintain a good trading mindset.
After determining the maximum loss per trade, you can then determine the entry point and stop loss point for the selected asset, which allows you to calculate the stop loss ratio (once the entry point is set, you can also estimate the profit-loss ratio, which I believe should generally be greater than 1.5 to consider opening a position).
Position size = Maximum loss per trade / Stop loss ratio.
For example, if the maximum loss per trade is 100 yuan and the stop loss ratio is 5%, then 100 / 0.05 = 2000 yuan, which calculates the position size for this trade. With a principal of 10,000 yuan, this position is equivalent to 20% of the capital.
If this trade eventually makes a profit, add half of the earned money to the maximum loss amount for the quarter, which serves both to snowball profits and to lock in some of the gains.
Then at the beginning of each quarter, all funds are recalculated.
Using the method of determining position based on loss, you will find the benefits:
The first benefit is that your per trade loss is predetermined, so if you want to improve profitability, you can only try to reduce the stop loss ratio as much as possible when opening a position, which means increasing the profit-loss ratio. Entering at more appropriate points rather than opening positions blindly.
Because if the stop loss ratio is too large, the position will inevitably be lighter, making the risk-reward ratio not worthwhile. This prompts your trading system to continuously optimize entry points; if the position is not suitable, it’s better not to enter than to act blindly.
The second benefit is that for assets with different volatilities, the risk tolerance is the same. For example, a highly volatile altcoin and the relatively less volatile S&P 500 index both have the same maximum loss per trade, so the position for the asset with lower volatility will inevitably be larger, while the position for the asset with higher volatility will be relatively smaller.
This is also applicable to contract trading; just include the leverage in the formula. Assuming the maximum loss per trade is still 100 yuan, leverage is 2 times, and stop loss ratio is 5%, then position size = maximum loss per trade / leverage / stop loss ratio = 100 / 2 / 0.05 = 1000 yuan. You will find that the higher the leverage, the smaller the position size. Yes, I never use high leverage because I prioritize thinking about trading from the perspective of maximum loss.
Let's talk about the practical considerations of determining position based on loss:
First, the focus of trading should shift to improving win rates and profit-loss ratios, rather than blindly pursuing large positions and low stop loss ratios.
Assuming the stop loss ratio is only 2%, but the win rate is only 1/10, meaning that out of 10 trades, 9 hit the stop loss, even though the per trade loss is fixed, the total loss remains large. It’s akin to betting that one of those trades will yield a very high profit-loss ratio. Moreover, this method will frequently hit stop losses, which can have a significant psychological impact on trading.
Second, what to do if there are multiple consecutive losses in a single quarter? One way is to actively reduce your trading frequency and review the reasons for low win rates in past trades; another way is to divide the remaining loss amount more finely, reducing the maximum loss per trade, allowing for more trading opportunities (though the corresponding position size will also decrease).
Third, what if the maximum loss amount for a single quarter is exhausted? My suggestion is to temporarily leave the market, focus on improving internal skills, enhance your understanding and trading system, review past trades, read books, or take a break to change your mood. Re-enter the market in the next quarter. Sometimes choosing not to trade is much better than trading.
Fourth, the maximum loss for a single quarter, whether this period is a single quarter, a single month, or half a year, is determined by each person's trading habits. In general, the larger the time period, the maximum loss ratio can be increased, and vice versa.
All the above parameters can be flexibly adjusted; the key is to find parameters that align with your trading habits and rhythm, and then execute them decisively.

@Vanarchain $VANRY #Vanar Loss-based position sizing means that the size of each trade is calculated based on the maximum possible loss. In other words, before trading, you determine the maximum possible loss and then decide the size of your trades based on that loss.
In my trading system, I believe that minimizing risk is more important than maximizing profit, as being able to maintain long-term net profitability requires that the capital does not have significant drawdowns. Based on this, I continuously work on improving the win rate and the profit-to-loss ratio to achieve the goal of maximizing profit.
Assuming my total capital is 10000 yuan, I set my maximum loss limit for a single quarter at 10%, which means a maximum loss amount of 1000 yuan. I can divide this 1000 yuan into 10 parts, each part being 100 yuan, which serves as my maximum loss per single trade. From a psychological perspective, keeping the single trade loss between 1% and 2% of the total capital can help maintain a good trading mindset.
After determining the maximum loss per trade, you can then determine the entry point and stop loss point for the selected asset, which allows you to calculate the stop loss ratio (once the entry point is set, you can also estimate the profit-loss ratio, which I believe should generally be greater than 1.5 to consider opening a position).
Position size = Maximum loss per trade / Stop loss ratio.
For example, if the maximum loss per trade is 100 yuan and the stop loss ratio is 5%, then 100 / 0.05 = 2000 yuan, which calculates the position size for this trade. With a principal of 10,000 yuan, this position is equivalent to 20% of the capital.
If this trade eventually makes a profit, add half of the earned money to the maximum loss amount for the quarter, which serves both to snowball profits and to lock in some of the gains.
Then at the beginning of each quarter, all funds are recalculated.
Using the method of determining position based on loss, you will find the benefits:
The first benefit is that your per trade loss is predetermined, so if you want to improve profitability, you can only try to reduce the stop loss ratio as much as possible when opening a position, which means increasing the profit-loss ratio. Entering at more appropriate points rather than opening positions blindly.
Because if the stop loss ratio is too large, the position will inevitably be lighter, making the risk-reward ratio not worthwhile. This prompts your trading system to continuously optimize entry points; if the position is not suitable, it’s better not to enter than to act blindly.
The second benefit is that for assets with different volatilities, the risk tolerance is the same. For example, a highly volatile altcoin and the relatively less volatile S&P 500 index both have the same maximum loss per trade, so the position for the asset with lower volatility will inevitably be larger, while the position for the asset with higher volatility will be relatively smaller.
This is also applicable to contract trading; just include the leverage in the formula. Assuming the maximum loss per trade is still 100 yuan, leverage is 2 times, and stop loss ratio is 5%, then position size = maximum loss per trade / leverage / stop loss ratio = 100 / 2 / 0.05 = 1000 yuan. You will find that the higher the leverage, the smaller the position size. Yes, I never use high leverage because I prioritize thinking about trading from the perspective of maximum loss.
Let's talk about the practical considerations of determining position based on loss:
First, the focus of trading should shift to improving win rates and profit-loss ratios, rather than blindly pursuing large positions and low stop loss ratios.
Assuming the stop loss ratio is only 2%, but the win rate is only 1/10, meaning that out of 10 trades, 9 hit the stop loss, even though the per trade loss is fixed, the total loss remains large. It’s akin to betting that one of those trades will yield a very high profit-loss ratio. Moreover, this method will frequently hit stop losses, which can have a significant psychological impact on trading.
Second, what to do if there are multiple consecutive losses in a single quarter? One way is to actively reduce your trading frequency and review the reasons for low win rates in past trades; another way is to divide the remaining loss amount more finely, reducing the maximum loss per trade, allowing for more trading opportunities (though the corresponding position size will also decrease).
Third, what if the maximum loss amount for a single quarter is exhausted? My suggestion is to temporarily leave the market, focus on improving internal skills, enhance your understanding and trading system, review past trades, read books, or take a break to change your mood. Re-enter the market in the next quarter. Sometimes choosing not to trade is much better than trading.
Fourth, the maximum loss for a single quarter, whether this period is a single quarter, a single month, or half a year, is determined by each person's trading habits. In general, the larger the time period, the maximum loss ratio can be increased, and vice versa.
All the above parameters can be flexibly adjusted; the key is to find parameters that align with your trading habits and rhythm, and then execute them decisively.

Loss-based position sizing means that the size of each trade is calculated based on the maximum possible loss. In other words, before trading, you determine the maximum possible loss and then decide the size of your trades based on that loss.
In my trading system, I believe that minimizing risk is more important than maximizing profit, as being able to maintain long-term net profitability requires that the capital does not have significant drawdowns. Based on this, I continuously work on improving the win rate and the profit-to-loss ratio to achieve the goal of maximizing profit.
Assuming my total capital is 10000 yuan, I set my maximum loss limit for a single quarter at 10%, which means a maximum loss amount of 1000 yuan. I can divide this 1000 yuan into 10 parts, each part being 100 yuan, which serves as my maximum loss per single trade. From a psychological perspective, keeping the single trade loss between 1% and 2% of the total capital can help maintain a good trading mindset.
After determining the maximum loss per trade, you can then determine the entry point and stop loss point for the selected asset, which allows you to calculate the stop loss ratio (once the entry point is set, you can also estimate the profit-loss ratio, which I believe should generally be greater than 1.5 to consider opening a position).
Position size = Maximum loss per trade / Stop loss ratio.
For example, if the maximum loss per trade is 100 yuan and the stop loss ratio is 5%, then 100 / 0.05 = 2000 yuan, which calculates the position size for this trade. With a principal of 10,000 yuan, this position is equivalent to 20% of the capital.
If this trade eventually makes a profit, add half of the earned money to the maximum loss amount for the quarter, which serves both to snowball profits and to lock in some of the gains.
Then at the beginning of each quarter, all funds are recalculated.
Using the method of determining position based on loss, you will find the benefits:
The first benefit is that your per trade loss is predetermined, so if you want to improve profitability, you can only try to reduce the stop loss ratio as much as possible when opening a position, which means increasing the profit-loss ratio. Entering at more appropriate points rather than opening positions blindly.
Because if the stop loss ratio is too large, the position will inevitably be lighter, making the risk-reward ratio not worthwhile. This prompts your trading system to continuously optimize entry points; if the position is not suitable, it’s better not to enter than to act blindly.
The second benefit is that for assets with different volatilities, the risk tolerance is the same. For example, a highly volatile altcoin and the relatively less volatile S&P 500 index both have the same maximum loss per trade, so the position for the asset with lower volatility will inevitably be larger, while the position for the asset with higher volatility will be relatively smaller.
This is also applicable to contract trading; just include the leverage in the formula. Assuming the maximum loss per trade is still 100 yuan, leverage is 2 times, and stop loss ratio is 5%, then position size = maximum loss per trade / leverage / stop loss ratio = 100 / 2 / 0.05 = 1000 yuan. You will find that the higher the leverage, the smaller the position size. Yes, I never use high leverage because I prioritize thinking about trading from the perspective of maximum loss.
Let's talk about the practical considerations of determining position based on loss:
First, the focus of trading should shift to improving win rates and profit-loss ratios, rather than blindly pursuing large positions and low stop loss ratios.
Assuming the stop loss ratio is only 2%, but the win rate is only 1/10, meaning that out of 10 trades, 9 hit the stop loss, even though the per trade loss is fixed, the total loss remains large. It’s akin to betting that one of those trades will yield a very high profit-loss ratio. Moreover, this method will frequently hit stop losses, which can have a significant psychological impact on trading.
Second, what to do if there are multiple consecutive losses in a single quarter? One way is to actively reduce your trading frequency and review the reasons for low win rates in past trades; another way is to divide the remaining loss amount more finely, reducing the maximum loss per trade, allowing for more trading opportunities (though the corresponding position size will also decrease).
Third, what if the maximum loss amount for a single quarter is exhausted? My suggestion is to temporarily leave the market, focus on improving internal skills, enhance your understanding and trading system, review past trades, read books, or take a break to change your mood. Re-enter the market in the next quarter. Sometimes choosing not to trade is much better than trading.
Fourth, the maximum loss for a single quarter, whether this period is a single quarter, a single month, or half a year, is determined by each person's trading habits. In general, the larger the time period, the maximum loss ratio can be increased, and vice versa.
All the above parameters can be flexibly adjusted; the key is to find parameters that align with your trading habits and rhythm, and then execute them decisively.

@Dusk $DUSK #Dusk
Loss-based position sizing means that the size of each trade is calculated based on the maximum possible loss. In other words, before trading, you determine the maximum possible loss and then decide the size of your trades based on that loss.
In my trading system, I believe that minimizing risk is more important than maximizing profit, as being able to maintain long-term net profitability requires that the capital does not have significant drawdowns. Based on this, I continuously work on improving the win rate and the profit-to-loss ratio to achieve the goal of maximizing profit.
Assuming my total capital is 10000 yuan, I set my maximum loss limit for a single quarter at 10%, which means a maximum loss amount of 1000 yuan. I can divide this 1000 yuan into 10 parts, each part being 100 yuan, which serves as my maximum loss per single trade. From a psychological perspective, keeping the single trade loss between 1% and 2% of the total capital can help maintain a good trading mindset.
After determining the maximum loss per trade, you can then determine the entry point and stop loss point for the selected asset, which allows you to calculate the stop loss ratio (once the entry point is set, you can also estimate the profit-loss ratio, which I believe should generally be greater than 1.5 to consider opening a position).
Position size = Maximum loss per trade / Stop loss ratio.
For example, if the maximum loss per trade is 100 yuan and the stop loss ratio is 5%, then 100 / 0.05 = 2000 yuan, which calculates the position size for this trade. With a principal of 10,000 yuan, this position is equivalent to 20% of the capital.
If this trade eventually makes a profit, add half of the earned money to the maximum loss amount for the quarter, which serves both to snowball profits and to lock in some of the gains.
Then at the beginning of each quarter, all funds are recalculated.
Using the method of determining position based on loss, you will find the benefits:
The first benefit is that your per trade loss is predetermined, so if you want to improve profitability, you can only try to reduce the stop loss ratio as much as possible when opening a position, which means increasing the profit-loss ratio. Entering at more appropriate points rather than opening positions blindly.
Because if the stop loss ratio is too large, the position will inevitably be lighter, making the risk-reward ratio not worthwhile. This prompts your trading system to continuously optimize entry points; if the position is not suitable, it’s better not to enter than to act blindly.
The second benefit is that for assets with different volatilities, the risk tolerance is the same. For example, a highly volatile altcoin and the relatively less volatile S&P 500 index both have the same maximum loss per trade, so the position for the asset with lower volatility will inevitably be larger, while the position for the asset with higher volatility will be relatively smaller.
This is also applicable to contract trading; just include the leverage in the formula. Assuming the maximum loss per trade is still 100 yuan, leverage is 2 times, and stop loss ratio is 5%, then position size = maximum loss per trade / leverage / stop loss ratio = 100 / 2 / 0.05 = 1000 yuan. You will find that the higher the leverage, the smaller the position size. Yes, I never use high leverage because I prioritize thinking about trading from the perspective of maximum loss.
Let's talk about the practical considerations of determining position based on loss:
First, the focus of trading should shift to improving win rates and profit-loss ratios, rather than blindly pursuing large positions and low stop loss ratios.
Assuming the stop loss ratio is only 2%, but the win rate is only 1/10, meaning that out of 10 trades, 9 hit the stop loss, even though the per trade loss is fixed, the total loss remains large. It’s akin to betting that one of those trades will yield a very high profit-loss ratio. Moreover, this method will frequently hit stop losses, which can have a significant psychological impact on trading.
Second, what to do if there are multiple consecutive losses in a single quarter? One way is to actively reduce your trading frequency and review the reasons for low win rates in past trades; another way is to divide the remaining loss amount more finely, reducing the maximum loss per trade, allowing for more trading opportunities (though the corresponding position size will also decrease).
Third, what if the maximum loss amount for a single quarter is exhausted? My suggestion is to temporarily leave the market, focus on improving internal skills, enhance your understanding and trading system, review past trades, read books, or take a break to change your mood. Re-enter the market in the next quarter. Sometimes choosing not to trade is much better than trading.
Fourth, the maximum loss for a single quarter, whether this period is a single quarter, a single month, or half a year, is determined by each person's trading habits. In general, the larger the time period, the maximum loss ratio can be increased, and vice versa.
All the above parameters can be flexibly adjusted; the key is to find parameters that align with your trading habits and rhythm, and then execute them decisively.

@Plasma $XPL #plasma $XPL
Loss-based position sizing means that the size of each trade is calculated based on the maximum possible loss. In other words, before trading, you determine the maximum possible loss and then decide the size of your trades based on that loss.
In my trading system, I believe that minimizing risk is more important than maximizing profit, as being able to maintain long-term net profitability requires that the capital does not have significant drawdowns. Based on this, I continuously work on improving the win rate and the profit-to-loss ratio to achieve the goal of maximizing profit.
Assuming my total capital is 10000 yuan, I set my maximum loss limit for a single quarter at 10%, which means a maximum loss amount of 1000 yuan. I can divide this 1000 yuan into 10 parts, each part being 100 yuan, which serves as my maximum loss per single trade. From a psychological perspective, keeping the single trade loss between 1% and 2% of the total capital can help maintain a good trading mindset.
After determining the maximum loss per trade, you can then determine the entry point and stop loss point for the selected asset, which allows you to calculate the stop loss ratio (once the entry point is set, you can also estimate the profit-loss ratio, which I believe should generally be greater than 1.5 to consider opening a position).
Position size = Maximum loss per trade / Stop loss ratio.
For example, if the maximum loss per trade is 100 yuan and the stop loss ratio is 5%, then 100 / 0.05 = 2000 yuan, which calculates the position size for this trade. With a principal of 10,000 yuan, this position is equivalent to 20% of the capital.
If this trade eventually makes a profit, add half of the earned money to the maximum loss amount for the quarter, which serves both to snowball profits and to lock in some of the gains.
Then at the beginning of each quarter, all funds are recalculated.
Using the method of determining position based on loss, you will find the benefits:
The first benefit is that your per trade loss is predetermined, so if you want to improve profitability, you can only try to reduce the stop loss ratio as much as possible when opening a position, which means increasing the profit-loss ratio. Entering at more appropriate points rather than opening positions blindly.
Because if the stop loss ratio is too large, the position will inevitably be lighter, making the risk-reward ratio not worthwhile. This prompts your trading system to continuously optimize entry points; if the position is not suitable, it’s better not to enter than to act blindly.
The second benefit is that for assets with different volatilities, the risk tolerance is the same. For example, a highly volatile altcoin and the relatively less volatile S&P 500 index both have the same maximum loss per trade, so the position for the asset with lower volatility will inevitably be larger, while the position for the asset with higher volatility will be relatively smaller.
This is also applicable to contract trading; just include the leverage in the formula. Assuming the maximum loss per trade is still 100 yuan, leverage is 2 times, and stop loss ratio is 5%, then position size = maximum loss per trade / leverage / stop loss ratio = 100 / 2 / 0.05 = 1000 yuan. You will find that the higher the leverage, the smaller the position size. Yes, I never use high leverage because I prioritize thinking about trading from the perspective of maximum loss.
Let's talk about the practical considerations of determining position based on loss:
First, the focus of trading should shift to improving win rates and profit-loss ratios, rather than blindly pursuing large positions and low stop loss ratios.
Assuming the stop loss ratio is only 2%, but the win rate is only 1/10, meaning that out of 10 trades, 9 hit the stop loss, even though the per trade loss is fixed, the total loss remains large. It’s akin to betting that one of those trades will yield a very high profit-loss ratio. Moreover, this method will frequently hit stop losses, which can have a significant psychological impact on trading.
Second, what to do if there are multiple consecutive losses in a single quarter? One way is to actively reduce your trading frequency and review the reasons for low win rates in past trades; another way is to divide the remaining loss amount more finely, reducing the maximum loss per trade, allowing for more trading opportunities (though the corresponding position size will also decrease).
Third, what if the maximum loss amount for a single quarter is exhausted? My suggestion is to temporarily leave the market, focus on improving internal skills, enhance your understanding and trading system, review past trades, read books, or take a break to change your mood. Re-enter the market in the next quarter. Sometimes choosing not to trade is much better than trading.
Fourth, the maximum loss for a single quarter, whether this period is a single quarter, a single month, or half a year, is determined by each person's trading habits. In general, the larger the time period, the maximum loss ratio can be increased, and vice versa.
All the above parameters can be flexibly adjusted; the key is to find parameters that align with your trading habits and rhythm, and then execute them decisively.