Understanding Position Sizing in Volatile Markets

It's easy to get caught up in the potential profit of a trade, but proper position sizing is fundamentally about managing risk. Instead of thinking about how much you could make, focus on how much you can afford to lose on any single trade. If you're risking, say, 1% of your total account on a trade, then even if your stop loss is hit on $USDCAD at 1.41129, the damage to your overall capital is limited, allowing you to survive drawdowns and continue trading. This discipline is key to long-term survival, especially when market volatility makes predicting short-term moves challenging.