Understanding Position Sizing Beyond 'What I Can Afford to Lose'

Been diving deeper into position sizing lately and it's more nuanced than just deciding what you can afford to lose. The real trick seems to be calibrating it to your risk tolerance and your stop-loss level on a per-trade basis, not just a fixed percentage of your total capital. For instance, if you're looking at a setup in $ADBE where your analysis puts your stop at, say, 240, and your total account risk is 1%, you're calculating your position size based on the dollar difference between your entry and 240, not just randomly allocating capital.

It feels like a game-changer for managing drawdowns and preserving capital for the next opportunity. It's making me re-evaluate past trades where I might have just guessed at how much to put in, especially on something like $USDZAR where volatility can really swing things around. Anyone else find that this dynamic approach to sizing drastically improved their P&L consistency?