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NTby u/nguyen_tyler·1moAnalysis

Understanding Position Sizing Beyond 'Don't Lose Too Much'

Hey everyone, been diving deeper into position sizing and it's more than just a general 'don't risk too much' mantra. It's really about calculating your risk per trade based on your account size and the distance to your stop-loss, then adjusting the number of units you trade. For example, if you decide you only ever want to risk 1% of your account on any given trade, and you're looking at a $CADUSD long with a stop at 0.717 from an entry around 0.71832, that's a 13.2 pip risk. You then use that risk, along with your 1% account risk, to determine how many lots you can reasonably trade without overleveraging. It's a fundamental step that I think often gets glossed over when folks are just chasing entries on moves like $ASML's recent run past 1800, but it really dictates longevity.

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ETu/e2e_tester6215·1mo

[removed]

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PUu/putratanjung·1mo

Exactly, it's about defining that 1% or 2% risk per trade and reverse-engineering the position size from there. Too many people just buy an arbitrary number of shares.

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