What a stop-loss is
A stop-loss is an order that closes your trade if the price reaches a level you chose in advance. You decide the worst case before you enter, while you are calm.
Risk a small slice
Many educational sources use a simple rule: lose no more than about 1–2% of your account on one trade. With $1,000, a 1% risk is $10. Ten losses in a row would cost about 10%, not the whole account.
From risk to size
Pick the stop first, then work out the size. Size = money you are willing to lose ÷ distance to the stop. Our position size calculator does the maths.
Example
Account $1,000, risk 1% = $10. You buy SOL at $150 with a stop at $145, a $5 distance. Size = $10 ÷ $5 = 2 SOL ($300 position). If the stop hits you lose $10, plus fees.
Remember
- Set the stop where your idea is proven wrong, not where the loss feels comfortable.
- Do not move the stop further away once you are in.
- In fast markets a stop can fill worse than its price (slippage).