Understanding Position Sizing: Why It's More Than Just a Number

Hey all, been digging into risk management lately and wanted to share a quick thought on position sizing, because I feel like it's often misunderstood as just picking how many shares or lots to trade. It's really about aligning your trade size with your overall portfolio risk tolerance, not just a single trade's potential loss. For example, if you're risking 1% of your capital per trade, and you've got a stop-loss set on a $USDZAR long where your entry is 16.48596 and your stop is at 16.46788, the difference (179 pips) dictates how much of your total capital you can allocate. It’s not just about the number of units, but ensuring that if that stop hits, you only lose your predefined 1% (or whatever your risk tolerance is). This approach protects your capital over the long run, even if you have a string of losing trades. It's the backbone of sustained trading, really. Anyone got alternative takes on how they approach this, especially with volatile pairs like $USDCAD trading around 1.40158?