Understanding Position Sizing Beyond 'Don't Lose Money'

It's easy to say 'don't lose too much,' but position sizing is the practical application of that. It's not just about setting a stop loss; it's about how much capital you expose based on your risk tolerance and the trade's specific risk-reward profile. For instance, if you're risking 1% of your account on any given trade, and a setup for $CRV has a stop at 0.2300 with an entry at 0.2414, your position size is dictated by that 0.0114 difference, not your total capital. The further your stop, the smaller your position needs to be to maintain that consistent 1% capital at risk.