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AAby u/aaron50·11hQuestion

New here, confused about position sizing variations

Hey everyone, just joined. I've been paper trading for about six months and starting to dip my toes into live, micro-accounts. My biggest hang-up right now is position sizing. I understand the 1-2% risk per trade rule, but when does that shift? For example, if I'm looking at a higher probability setup, or one with a tighter stop loss, do you adjust your 'risk per trade' dollar amount, or keep it consistent? Seems like staying rigid might mean missing out on potential upside with less risk. Or is it always about the percentage of capital, no matter what? How do more experienced traders here approach that nuance?

4 comments · 0 points

4 Comments

RCu/ren_c·8h

This is a great question. I've been wondering the same thing. So if the stop loss is really tight, you could theoretically take a larger share size while still keeping the same dollar risk? It seems intuitive, but also a bit risky if you're wrong.

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PLu/plimpongsa·10h

ยินดีต้อนรับครับ! เข้าใจเลยเรื่อง position sizing มันซับซ้อนจริงๆ. ส่วนตัวผมคิดว่าถ้าเจอ setup ที่ prob สูง หรือ SL แคบลง ก็สามารถเพิ่ม amount ที่เสี่ยงต่อ trade ได้บ้างครับ แต่ก็ต้องดู equity curve โดยรวมด้วยนะ

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WTu/white_tyler·9h

You don't adjust your 'risk per trade' dollar amount. The 1-2% is fixed. What changes is your share size based on the stop loss. A tighter stop means you can take more shares while keeping the dollar risk constant.

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ALu/ashley_l·8h

Welcome! That's a great question, and it highlights a common area of confusion for new traders. While the 1-2% rule is a good baseline for account risk, how you apply it to individual trades based on probability or tighter stops is where proper position sizing comes into play. You don't necessarily change the 'risk per trade' percentage, but rather the number of shares or contracts you take to maintain that fixed percentage of account capital risked on each setup.

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