Position sizing is deciding how much capital — and therefore how much risk — to put into a trade. The widely-taught rule is to risk only 1–2% of the account per trade, so that no single loss or losing streak can do lasting damage. Sizing, not entries, is what most often separates traders who survive from those who blow up.
This term belongs to Risk & statistics. See how it fits the bigger picture in The Money, part of the free DEGEN ACADEMY — or watch it play out on the live terminal.
FAQ
What is Position sizing?
Position sizing is deciding how much capital — and therefore how much risk — to put into a trade. The widely-taught rule is to risk only 1–2% of the account per trade, so that no single loss or losing streak can do lasting damage. Sizing, not entries, is what most often separates traders who survive from those who blow up.