Understanding Position Sizing: Protecting Your Capital

One critical concept often overlooked by newer traders is proper position sizing. It's not just about how much you can afford to lose on a single trade, but rather how much capital you are willing to expose relative to your total account value, usually expressed as a percentage. For instance, if you risk 1% of your $10,000 account, that's $100 per trade, regardless of the asset or its price action like current $ETHUSD levels; this helps manage overall portfolio volatility.