Understanding Position Sizing in Energy Trading

Look, people always focus on entries and exits, but if you don't nail your position sizing, you're just gambling. It's not about how much you want to make, it's about how much you can afford to lose on any single trade, often expressed as a percentage of your total capital. For instance, if you're risking 1% of your account on a WTI crude trade, and your stop loss is set at a point that would mean a $500 loss, then that $500 has to represent exactly 1% of your total trading capital. It sounds simple, but it's the bedrock of longevity in this game.