Understanding Position Sizing Beyond Your Account Balance

It's not just about what percentage of your total capital you allocate. Good position sizing also considers the volatility of the asset and your defined stop-loss. For example, a larger percentage of your account allocated to a relatively stable $LDO might still result in less dollar risk than a smaller percentage in something as volatile as $NATGAS if your stop-loss on $LDO is tight and your stop on $NATGAS is wider, proportional to its daily range (e.g., $NATGAS trading at 2.803 with a typical 5% daily swing vs. $LDO at 0.30579 with less movement).