Trading guide · position size formula trading
How to Calculate Position Size in Trading
Use a simple risk-first position size formula instead of sizing from confidence.
Position size is math, not confidence. Decide the amount you can risk first, then let stop distance determine size.
What to remember
- Position size = amount willing to risk ÷ distance to stop loss.
- A wider stop requires a smaller position to preserve the same risk.
- Define risk before entry instead of negotiating it during the trade.
Good sizing keeps one trade from becoming an account-level event.
Trading is probabilistic. No setup guarantees a result, and this guide is educational rather than financial advice. Build a process, define risk before entry, and review your decisions honestly.
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