New here, question on position sizing consistency

Question

Hey everyone, just joined. Been trading equities for a little over a year, mostly discretionary, small accounts. I've been trying to get a handle on position sizing consistently. My current method is just a fixed dollar amount per trade, which feels a bit arbitrary and doesn't really scale with my conviction or the actual volatility of the setup. I've looked into the fixed fractional and ATR methods, but they seem to swing position sizes pretty wildly sometimes, which feels like it's introducing more risk than it mitigates in choppy markets.

For those of you with more experience, especially in equities, how do you approach position sizing for different setups? Do you stick to one method religiously, or does it vary based on market conditions or the specific stock?

takin25395511 · Accepted Answer

Fixed dollar sizing is simple, but as you've noted, it quickly shows its limits. Many find fixed fractional or ATR-based methods more robust for managing risk as account sizes change or volatility shifts. Are you finding a specific pain point with your current method that one of the others might address better, or are you just looking for a more principled approach?

mpark · Answer

Welcome! That's a great question to start with. I used to do the fixed dollar amount thing too, and totally get how it feels arbitrary. Have you looked into the idea of sizing based on a fixed percentage of your account per trade for risk management?

sarah55 · Answer

Fixed fractional sounds interesting. I've been doing a fixed dollar amount too, and it does feel like I'm missing something when the setups are clearly different in terms of risk. Have you tried fixed fractional yet, or are you still exploring?

New here, question on position sizing consistency

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