Understanding Position Sizing for Risk Management

Look, I see too many new traders blow up because they don't get position sizing. It's not about how much you can buy; it's about how much you should buy relative to your stop-loss and total account risk. Figure out your max loss per trade first (e.g., 1-2% of your capital), then work backwards. If $COMP is at 12 and your stop is at 11.5, that's a $0.50 risk per share. If your account is $10,000 and your max risk is 1%, you can risk $100. So, $100 / $0.50 = 200 shares. Simple math, serious impact on survival.