risk-mgmt

Position sizing with Kelly Criterion

Mathematically optimal bet sizing for crypto

15 min · advanced

What you'll have when finished

• Compute optimal position size from your trade history
• Understand why Half/Quarter Kelly is safer for crypto
• Avoid over-betting and ruin

Before you start

• Kelly assumes accurate probability estimates — rarely true in trading
• Full Kelly produces large drawdowns. Use Quarter Kelly for crypto.

Walkthrough

1. Build a trade history

   Kelly needs at least 30+ resolved trades to be meaningful. Less than that = noisy estimate.

2. Open the Kelly tab

   Portfolio Analytics → Kelly. Review your win rate, avg win, avg loss.

3. Use Quarter Kelly

   If Full Kelly says risk 25% per trade, use 6.25% (Quarter Kelly). Survives variance.