Position Sizing
Position sizing is the process of determining how much capital to risk on a single trade based on your account size, risk tolerance, and the trade's stop loss distance.
Understanding the Concept
This is literally the difference between surviving and blowing up your account. You can have a 70% win rate and still go broke if your position sizing is trash. The rule most pros follow: never risk more than 1-2% of your account on a single trade. So if you've got $10,000, you're risking $100-$200 max per trade. Sounds conservative? That's how you survive 10 losses in a row without getting wiped out. Beginners go all-in on "sure things" and wonder why they're broke after three bad trades. Position sizing gives you staying power. It's not sexy, but it keeps you in the game long enough to actually get good.
Real-World Example
You've got $20,000 and want to risk 1% ($200) on a BTC trade. Entry is $45,000, stop loss at $44,000. That's $1,000 risk per coin. $200/$1,000 = 0.2 BTC position size.
How Strykr Helps
Strykr's AI assistant helps you understand and apply Position Sizing concepts to your trading. Get personalized guidance and real-time market analysis to make better decisions.
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