Put every input on one line
Use a fictional PHP 80,000 account and write these inputs before calculating anything:
| Input | Fictional value |
|---|---|
| Current trading equity | PHP 80,000 |
| Planned risk percentage | 1% |
| Planned risk budget | PHP 800 |
| Entry price | PHP 200 |
| Invalidation price | PHP 194 |
| Loss per unit | PHP 6 |
| Reserved cost/slippage buffer | PHP 80 |
The price-risk portion of the budget is PHP 720 after reserving PHP 80 for costs.
PHP 720 ÷ PHP 6 = 120 units
At PHP 200 per unit, the notional position is PHP 24,000.
Audit the units before accepting the answer
A position-sizing error often comes from mixing units rather than from difficult mathematics. If the account is in PHP but the instrument is quoted in US dollars, the conversion rate and its timestamp become part of the calculation. If the contract represents more than one unit of the underlying asset, contract size must be included. If the order increment allows only whole units, 120.7 units may need to be rounded down.
Write the unit beside every input. A number without a unit is an invitation to make a silent mistake.
Recalculate when equity or invalidation changes
Suppose the account falls from PHP 80,000 to PHP 72,000 after a drawdown. A 1% risk budget is now PHP 720, not PHP 800. If the same PHP 80 buffer is retained, only PHP 640 remains for price movement.
PHP 640 ÷ PHP 6 ≈ 106.67 units
If the market permits whole units only, the learner might round down to 106 units. Using the old 120-unit size would quietly increase risk relative to current equity.
Add an execution-feasibility check
The worksheet should include a final question: Can this size be entered and exited under the assumed conditions without changing the risk estimate materially?
If the visible depth near the exit is poor, if spreads widen during the relevant session, or if a market order of this size would move price significantly, reduce size or reject the setup. The formula does not override the market.
Completion check
Build one sheet with a normal case and one stressed case. In the stressed case, assume the exit is 1% worse than the planned invalidation. Calculate the additional loss in pesos and decide whether the original size still fits the risk budget.
If you cannot show the path from current equity to final rounded size—and explain what could make that size too large—the worksheet is not finished.
*Cryptocurrency and virtual asset transactions are highly volatile and irreversible, may result in significant losses, and do not guarantee returns; customers should trade only after understanding the risks involved.
