Knowledge Base

Position Sizing

Position Size = (Capital × Risk%) / Stop Loss Distance

Never risk more than 1-2% of your capital on a single trade.

Position sizing is the #1 risk management tool — more important than entry strategy.

A ₹5L account risking 1% = ₹5,000 max loss per trade.

Adjust position size based on volatility — smaller positions in volatile markets.

Professional traders often risk 0.5% per trade, allowing 200 consecutive losses before ruin.

Pro Tip

Calculate position size BEFORE entering any trade. This single discipline separates profitable traders from gamblers.

Position Sizing - Complete Guide

Everything you need to know about Position Sizing and how to optimize your financial strategy.

Understanding the Formula

The core calculation is based on:

Position Size = (Capital × Risk%) / Stop Loss Distance

Key Concepts & Rules

Never risk more than 1-2% of your capital on a single trade.

Position sizing is the #1 risk management tool — more important than entry strategy.

A ₹5L account risking 1% = ₹5,000 max loss per trade.

Adjust position size based on volatility — smaller positions in volatile markets.

Professional traders often risk 0.5% per trade, allowing 200 consecutive losses before ruin.

Expert Strategy

Calculate position size BEFORE entering any trade. This single discipline separates profitable traders from gamblers.

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