1. The Position Sizing Formula:
To find out exactly how many units (shares, lots, or coins) to buy, use this formula:
$BNB Position\ Size = (Account Risk)(Trade Risk)
Account Risk:
The total dollar amount you are willing to lose (e.g., 1% of a $5,000 account = $50).
Trade Risk:
The distance between your Entry Price and your Stop Loss.
2. Creating Your Trading Plan
The "Why" (Setup):
Am I trading a breakout, a trend-line bounce, or a reversal?
The "When" (Entry):
What specific candle or indicator trigger am I waiting for?
The "Exit" (Stop Loss):
At what price point is my idea proven wrong? (Place this before you enter).
The "Win" (Take Profit):
Where is the next major resistance where I will take my money?
The "Reward":
Is my potential profit at least 2x or 3x my potential loss?
3. The Power of "Risk-to-Reward" (R:R)
Most beginners think they need to be right 90% of the time. They don't. If your Risk-to-Reward ratio is 1:3, you can lose 60% of your trades and still be very profitable.
Win Rate: .R:R Ratio. Result.
40% (Win 4, Lose 6). 1:3. Profitable (4 wins × 3 = 12 units; 6 losses × 1 = 6 units)
50% (Win 5, Lose 5). 1:1. Breakeven (minus fees)
30% (Win 3, Lose 7). 1:5. Profitable
Your Next Step.
The best way to learn is by doing. Give me a hypothetical scenario (e.g., "I have $1,000 and want to buy Bitcoin at $60,000 with a stop at $58,000") and I will calculate the exact position size and risk-to-reward for you.
