Understanding Position Sizing for European Equities

Too many new traders blow up their accounts not because they can't pick winners, but because they don't understand position sizing. It's not just about setting a stop-loss; it's about defining how much capital you're willing to risk per trade, then calculating your share count based on that. Say you decide you'll never risk more than 1% of your total account on any single trade. If your account is €100,000, that's €1,000. Now, if you're looking at a DAX constituent, and your entry and stop-loss are €5 apart, you'd only buy 200 shares (€1,000 / €5) – simple as that. This ensures that even a string of losers, which inevitably happens, doesn't cripple your capital base. Don't eyeball it; calculate it. Discipline here is paramount, regardless of whether you're trading $NFLX or a more volatile local index stock. It's the only way to survive long-term in these markets.