The 1% Rule: How Much Should You Risk Per Crypto Trade?

BullCalc Team · October 11, 2026 · 3 min read

Ask a group of experienced traders what keeps them in the game and most will not talk about their best entry or favourite indicator. They will talk about risk. More specifically, about how little they risk on any one trade. The most common version of this idea is the 1% rule.

What the 1% rule says

The rule is simple: never lose more than 1% of your account on a single trade. With a 5,000 USDT account, that means your stop loss should cost you at most 50 USDT. Some traders allow 2%, very conservative traders use 0.5%. The exact number matters less than having a fixed limit and sticking to it.

Note that the rule is about how much you lose if the stop is hit, not how much money you put into the trade. A 1% risk trade can still be a large position if the stop is close to the entry.

Why such a small number?

Because losing streaks are normal. Even a strategy that wins 55% of the time will regularly have runs of five, six or more losses in a row. The table below shows what is left of a 1,000 USDT account after ten losses in a row at different risk levels.

At 1% a bad run is annoying. At 10% it can end your trading. The deeper the hole, the harder it is to climb out, because a 50% loss needs a 100% gain just to get back to where you started.

How to apply it step by step

1. Find your stop first. Put the stop where your idea is clearly wrong, for example below the last swing low for a long.
2. Measure the distance. If you buy at 100 and your stop is at 96, the stop is 4% away.
3. Size the position. Divide your risk amount by the stop distance. With 50 USDT risk and a 4% stop, the position is 50 / 0.04 = 1,250 USDT.
4. Pick leverage last. Leverage only decides how much margin the 1,250 USDT position locks. Make sure the liquidation price is further away than your stop.

The position size calculator does steps 2 and 3 for you in a second.

Common mistakes

• Moving the stop to fit a bigger position. The stop should come from the chart, not from how much you want to make.
• Ignoring fees. On tight stops, fees can add a noticeable amount to each loss.
• Raising risk after a loss. Trying to win it back quickly is how small drawdowns turn into large ones.
• Counting several correlated trades as separate. Five altcoin longs at 1% each often behave like one 5% trade.

Is 1% too boring?

It can feel slow, especially in a fast market. But small risk lets you trade long enough for your edge to show. A trader who risks 1% and makes 2R per winning trade can grow the account steadily without ever being one bad week away from zero. That is the real goal of the rule: staying in the game.

This article is for education only and is not financial advice.