How Much Should You Risk per Crypto Trade? 1% vs 5% After 10 Losses

Use one formula for every row: ending balance = starting balance × (1 − risk fraction)^loss count. Because each loss is a percentage of the current balance, the dollar loss shrinks a little as the account shrinks, so ten 1% losses cost $95.62, not $100.

Recovery is the part people underestimate: recovery = drawdown ÷ ending balance. A 9.56% drawdown needs about 10.57% to repair. A 40.13% drawdown needs about 67.02%, because the gain is earned on a smaller balance. Losing streaks happen in any record of trades, so pick the percentage you could live with through one.

The risk budget is what you plan to lose if the stop fills: 1% of $1,000 is $10. Position notional is the size of the position: with a $100 entry, a $98 stop and a 0.055% fee on each fill, the $10 budget allows about 4.7418 units, or about $474.18 of notional, because the 2% stop plus fees must fit inside $10.

Margin is the collateral the exchange locks: the full $474.18 at 1x, or about $94.84 at 5x. Leverage changes the margin, not the $10 budget or the size. What leverage does change is how close liquidation sits, which can close the position before your stop.

A stop loss is an order, not a ceiling. The realized loss can differ from the plan, and it is usually the gaps that make it bigger.

The rule worth keeping is simple: decide the maximum loss on every trade before entering it, and reduce that fraction as the account grows, because the same percentage becomes a larger dollar amount. 1% is a common starting point for scenario planning; at 5%, the same ten-loss streak needs about a 67.02% gain to repair.

Run your own balance, stop and fee rate through the calculator before choosing. The number you pick is an input, not a recommendation, and no percentage guarantees a smaller loss or any return.