The Importance of Position Sizing

Many people often focus only on entry and exit points, but forget about Position Sizing, which is equally important.

The core is to control the risk per trade. If we set a risk, for example, 1% of the portfolio, no matter how good the chart looks, if the stop loss is too far to be acceptable for the appropriate position size, we must reduce the size or not trade at all.

For a simple example, if the portfolio is 100,000 baht and the risk is 1%, which is 1,000 baht. If the stop point for $TOP is at 11.34 and we enter at 11.52, the distance is 0.18 baht. We can only trade 1000 / 0.18 = 5,555 shares, not invest everything.

Doing this helps us survive in the market longer.