Introduction

Position sizing is about how much you choose to buy. Risk limits are about how much you are prepared to lose if things go wrong.

You don’t need to be “good at maths” to handle either. A few calm rules can protect you more than any fancy strategy.

What you’ll learn

• What position sizing means in everyday language.
• A simple, safe way to choose how much to buy.
• How to set your own personal risk limits.
• Why small sizes reduce emotional pressure.
• A basic framework you can reuse for life.

1. Position sizing in plain English

Any time you buy digital currency, you are choosing a position size:

Many people decide this based on excitement or fear. You’ll do it based on simple, calm rules instead.

2. A very simple safety rule

One widely-used guideline is:

For example (numbers just for illustration):

• Total savings £2,000 → £20–£40 per buy.
• Total savings £10,000 → £100–£200 per buy.

You can be even more conservative if you like. The key idea is: small pieces, spread out over time.

3. Risk limits that fit your real life

Risk limits are personal rules that protect you from yourself. Examples:

• Money limit: never use rent, bills or emergency funds.
• Monthly limit: a fixed maximum you’ll put in per month.
• Emotional limit: if you feel anxious, you stop buying.

These limits are not about being “weak”. They’re about staying safe enough to keep learning.

4. Why small sizes reduce emotional pressure

When position sizes are too big, every price movement starts to feel personal.

• You may check prices constantly.
• Small drops feel huge.
• It’s harder to sleep or focus on other things.

Smaller sizes mean:

• More calm.
• More time to think.
• More space to make good decisions.

5. A simple framework you can reuse

Here’s a very basic structure you can adapt:

• Decide the maximum total amount you’ll ever put into digital currency.
• Divide that into 10–20 equal “chunks”.
• Only ever use one chunk at a time.
• Pause and review after each purchase.

This model works for both holding and slower, calmer types of trading.

6. Your next steps

You now have the foundations of position sizing and risk limits in everyday language — enough to protect yourself from the most common mistakes.

In the next lesson, you’ll explore the emotional side more deeply: how FOMO, panic and greed can push people away from their own rules — and how to stay centred when that happens.

• Lesson 15 – Emotions: FOMO, Panic and Greed