Deciding how much to trade, calculated from the distance to your stop and the amount you are willing to lose.
Last verified 13 September 2026 · written by the DexLadder team
What it means
Deciding how much to trade, calculated from the distance to your stop and the amount you are willing to lose.
Why it matters when you trade
Sizing, not entry, is what decides whether an edge survives. The formula runs backwards from risk: choose the fraction of the account you will lose if wrong, measure the distance to invalidation, and let those two produce the size. Traders who size by conviction instead are running a variable-risk strategy whose largest bets arrive precisely when they are most certain — and certainty is uncorrelated with being right.
Worked example
$10,000 account, 1% risk ($100), entry 50.00, stop 47.50 (risk 2.50 per unit) → 40 units, a $2,000 position. Widen the stop to 45.00 and the same risk allows only 20 units.
See it on live markets
DexLadder runs position sizing against live market and pool data, with simulated capital, so you can watch it act on an order instead of reading about it — no account, no wallet, nothing installed.