Position Size Formula for Crypto Futures: Why Leverage Doesn't Change It

Position size is the money you'll accept losing on the trade, divided by what each coin loses if your stop gets hit, fees included. Leverage isn't in that formula at all. It only decides how much margin you lock up to hold the size the formula gave you.

That's the whole method. The rest of this page shows why it works, where fees sneak in, and the one check leverage does add.

The formula

Size in coins = risk amount ÷ (stop distance per coin + round-trip fees per coin).

The risk amount is the dollar loss you pick before the trade. Stop distance is the gap between entry and stop. Round-trip fees are what you pay to open plus what you pay to close, worked out per coin. Multiply the size by your entry price and you get the notional value, which is the dollar amount of exposure you actually hold.

Notice the order. You start from the loss and work back to the size. The common way to blow up runs the other way: pick a big number on the leverage slider, click max, and only then wonder where the stop goes.

Pick the stop before the size

The stop is the price where your reason for the trade stops being true. For a long that's usually under a swing low; for a short, above a swing high. It comes off the chart.

Once it's placed, the size falls out of the math. Moving the stop to fit a size you already wanted defeats the point, because then the chart isn't deciding anything. If the honest stop is so wide that the size comes out tiny, that is useful information. The trade may not be worth taking at your risk level.

Example: say your account is $10,000 and you risk 1% per trade, so $100. You want to go long a coin at $100, and the chart says you're wrong below $95. Stop distance: $100 − $95 = $5 per coin. Say fees work out to $0.10 per coin for the round trip (a made-up figure for the arithmetic). Loss per coin at the stop: $5 + $0.10 = $5.10. Size: $100 ÷ $5.10 = 19.6 coins, which you'd round down to 19. Notional value: 19 × $100 = $1,900. Margin at 5x: $1,900 ÷ 5 = $380. Margin at 10x: $1,900 ÷ 10 = $190. Loss if the stop fills, at either leverage: 19 × $5.10 = $96.90.

Look at the last line. Doubling the leverage halved the margin and left the loss exactly where it was.

Why leverage doesn't change your size

This is where a lot of traders get it backwards, and it's easy to see why. The leverage slider sits right next to the order box, so it feels like it controls how big you go.

It doesn't control your loss. In the example, price moving five dollars against nineteen coins costs the same whether you posted the larger margin or half of it. The exchange doesn't care how much collateral sits behind the position when it calculates your PnL. It only cares about size and price.

Fees are charged on notional value too, so the same coins cost the same to open at low leverage or at very high leverage.

What leverage does move is margin and liquidation. Margin is notional divided by leverage. And with less margin behind the position, the liquidation price sits closer to your entry.

The one check leverage adds

Your liquidation price has to sit past your stop, with room. If liquidation comes first, the exchange closes you before your stop can fire, and many exchanges add a liquidation fee on top. You lose more than the amount you planned.

So after you've sized the trade, raise leverage only as far as keeps liquidation well beyond the stop. Our own default is to keep the distance to liquidation at least twice the distance to the stop. So the wider your stop, the lower your leverage ceiling. The rule breaks down on very wide stops, and it's rough, because the exact liquidation price depends on your exchange's maintenance margin and whether you're on isolated or cross margin. Read the liquidation field the exchange shows you before you confirm.

If the number is too close, lower the leverage. Leave the size alone.

Fees hurt most on tight stops

Fees scale with notional value. A tighter stop means a bigger position for the same risk, and a bigger position pays bigger fees.

Example: same $10,000 account, same $100 of risk, same coin at $100, but the stop moves to $99. Stop distance: $1 per coin. Fees stay at the made-up $0.10 per coin. Without fees: $100 ÷ $1 = 100 coins. With fees: $100 ÷ $1.10 = 90.9, so 90 coins. Size those 100 coins without counting fees and a stopped trade costs 100 × $1.10 = $110, which is 10% over plan.

Ten percent over plan on every stopped trade is not a rounding error.

A scalper taking dozens of trades a week feels that fast. On a swing trade with a wide stop, the same fee is noise. Our stance: always put fees inside the loss per coin, since it costs you nothing on wide stops and saves real money on tight ones.

Use the taker rate for both sides when your stop is a market order, since stops usually fill as takers.

Shorts work the same way

For a short, the stop is above entry and the stop distance is stop minus entry. Fees, margin and the liquidation check are identical, just mirrored.

How much to risk per trade

The risk amount is the one input nobody can hand you. The usual starting point is the one percent rule: never lose more than one percent of the account on a single trade. On futures, plenty of traders go lower.

Fixed percent means the dollar risk shrinks as the account shrinks, which slows a drawdown. A fixed dollar amount is simpler to track and fine for a small account, but it doesn't slow anything down. Some traders also cut risk after a losing streak and restore it once they're back.

Losing streaks happen even to a sound method. At one percent risk, ten losses in a row cost you under a tenth of the account. At ten percent risk, the same streak leaves you with about a third of it. Sizing is what keeps you trading long enough for an edge to show up, if you have one.

Whatever figure you pick, set it before the trade. Raising it to win back a loss is how a one percent rule quietly turns into a five percent rule.

Mistakes that break the formula

Sizing from the leverage slider is the big one, because then your risk depends on where liquidation lands. Skipping fees costs little on wide stops and a lot on tight ones. Widening a stop after sizing, without cutting size, pushes your risk past plan.

Two quieter ones. Size from your real fill price, not the mark price. And if you hold a perpetual for days, funding gets charged or paid at set times, so leave some slack in the risk amount. When the size doesn't fit the exchange's order step, round down, never up.

Position sizing checklist

1. Decide the risk amount for this trade.
2. Mark entry and stop on the chart.
3. Work out the stop distance per coin.
4. Add round-trip fees per coin at the taker rate.
5. Divide the risk amount by that loss per coin.
6. Pick leverage to set margin, then confirm liquidation sits well beyond the stop.
7. Round the size down to the exchange's order step.

A position size calculator runs these steps for you. Knowing the formula lets you catch it when one of the inputs is wrong.

Not financial advice. This page explains the math of sizing a trade. It does not suggest any trade, coin or direction.

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How do you calculate position size in crypto futures?

Divide your risk amount by the loss per coin at your stop, where that loss is the stop distance plus round-trip fees. The answer is the number of coins to trade, at any leverage.

Does leverage change position size?

No. With a fixed risk and stop, the size is the same at any leverage. Leverage only changes the margin you post and how close liquidation sits to your entry.

What is the one percent risk rule in crypto?

You never lose more than one percent of the account on a single trade. That becomes your risk amount, and you size the position so a hit stop costs exactly that, fees included.

Should fees be included in position size?

Yes. You pay to open and to close, so the real loss at the stop is the stop distance plus both fees. On tight stops that can be a tenth of your planned risk.

What happens if my liquidation price is before my stop?

The exchange closes you before your stop fires, and you lose more than planned. Lower the leverage until liquidation sits well past the stop, and keep the size the same.