Position Sizing for Crypto Futures
Same formula, different inputs
The calculation that sizes a forex trade also sizes a crypto futures trade. You are still solving for one number: how many units can I hold so that getting stopped out costs me the amount I decided to risk.
What changes in crypto is not the formula but the specification you feed it. Contract sizes, unit steps and fee schedules differ between venues and between products on the same venue, and they are not standardised the way a forex lot is. That makes the three fields below worth checking before you trust any size a tool prints.
- Contract size — how much of the underlying one unit of the order represents. Some products are quoted in coin terms, some in USD or USDT terms. Get this wrong and every downstream number is wrong by the same factor.
- Unit step — the smallest increment the venue accepts. Crypto perpetuals commonly allow fractions of a coin, so the step is often 0.001 or 0.0001 rather than 1.
- Fee assumption — maker and taker fees differ, and they differ by tier. Enter your own number rather than a default, and treat it as an estimate.
The calculator on the home page lets you set all three. For a USDT pair with a USD account, the quote-to-account rate is usually 1, because USDT is treated as one US dollar for sizing purposes.
Worked example: a BTCUSDT perpetual
Assume a 10,000 USD account, 1% risk, a long entry at 60,000 with a stop at 59,400, a 10 USD spread, a 12 USD round-turn commission, and a unit step of 0.001 BTC. Contract size is 1, meaning one unit equals one coin.
| Input | Value |
|---|---|
| Account balance | 10,000.00 USD |
| Risk per trade | 1% = 100.00 USD |
| Entry price | 60,000.00 |
| Stop-loss price | 59,400.00 |
| Spread | 10.00 |
| Commission (round turn) | 12.00 USD |
| Quote-to-account rate | 1.00 (USDT treated as USD) |
| Unit step | 0.001 |
Step by step
- Risk budget: 10,000.00 x 1% = 100.00 USD.
- Stop distance: 60,000.00 - 59,400.00 = 600.00, which is 1% of the entry price.
- Effective stop distance: 600.00 + 10.00 = 610.00.
- Budget left after commission: 100.00 - 12.00 = 88.00 USD.
- Units: 88.00 / 610.00 = 0.144262 BTC.
- Round down to the unit step: 0.144262 / 0.001 = 144.26, floor to 144, so 0.144 BTC.
- Check the worst case: 0.144 x 610.00 = 87.84, plus 12.00 commission = 99.84 USD. Inside the 100.00 budget.
Notional exposure is 0.144 x 60,000.00 = 8,640 USD, which is 86.4% of the account even though the risk is 1%. That gap is normal and it is the whole point of leverage. At 10x leverage the margin you post is 8,640 / 10 = 864 USD. Change the leverage to 20x and the margin halves to 432 USD; the size stays 0.144 BTC and the loss at the stop stays 99.84 USD. Leverage moves the margin, not the risk.
Why crypto sizes come out smaller than newcomers expect
Crypto markets move further in percentage terms than most currency pairs, so a sensible stop is usually wider in percentage terms. Wider stop distance mechanically produces a smaller position, because stop distance sits in the denominator. A 1% move away from entry on BTC at a price of 60,000 is 600 USD of movement per coin. A 1% move away from entry on EUR/USD at 1.1000 is 0.0110 USD of movement per unit. Same risk budget, wildly different price distance per unit, so wildly different unit count. That is the formula behaving correctly, not a bug.
The practical consequence is that small accounts run into the unit step quickly. If your budget after commission divided by the effective stop distance comes out below one unit step, the correctly rounded size is zero, which is the calculator telling you the trade cannot be sized properly on that account, not telling you to round up.
Funding, liquidation and where the formula stops
Perpetual contracts carry a funding payment between longs and shorts at set intervals. Funding is a holding cost, not an entry cost, so it does not belong in the stop-distance calculation. What it does do is slowly move your realised outcome away from the planned one the longer a position stays open. If you hold for days, account for it separately.
Liquidation is the other thing the sizing formula does not model. Your position is closed by the venue when remaining margin falls to the maintenance level, and that level depends on the venue, the leverage and the contract. A stop-loss order is your own instruction; liquidation is theirs. Placing your stop at a price that would only be reached after liquidation makes the stop useless, so check that the stop you sized from sits comfortably before the liquidation price your platform displays.
Neither of these changes the arithmetic above. They are reasons to sanity-check the result, not reasons to adjust the formula.
Checklist before you place the order
- Contract size and unit step copied from the venue's own specification for that exact product.
- Fee estimate in your own tier, entered as a round-turn amount.
- Stop distance taken from the chart in price terms, plus the spread.
- Size rounded down, and the worst case recomputed from the rounded size.
- Liquidation price checked against your stop.
- Leverage set last, and only to control margin.