Understanding Position Sizing: Not Just How Much, But How to Manage Risk

Hey everyone, wanted to touch on position sizing today, because it's a concept I still see a lot of folks not fully grasping beyond just 'how many shares do I buy?'. It's really about controlling your risk per trade, regardless of what's happening with the broader market or even an individual stock like $UGAZ. If you have, say, a 1% risk tolerance per trade, and your stop-loss for a setup on $UGAZ is at 10.61 from an entry around 10.82, you calculate your shares based on that 21-cent difference, not just your total capital. It keeps you in the game longer, especially when you hit a string of small losses, and it's a bedrock of sound trading.