Understanding Position Sizing in Volatile Markets

One of the most critical, yet often overlooked, aspects of trading is position sizing. It's not about being right or wrong on a particular trade, but how much you allocate to each setup relative to your total capital. For instance, in a choppy environment, even a seemingly strong name like $NVDA, currently around $199, can swing several percentage points in a day, which can quickly erode capital if positions are too large. Proper sizing ensures that no single trade, even if it goes completely against you, can wipe out a significant portion of your account, allowing you to survive to trade another day and capitalize on future opportunities.