Risk & performance
Position sizing
Also known as: money management, bet sizing
Position sizing is deciding how much capital to risk on each trade, typically as a fixed percentage of the account.
Common methods risk a fixed fraction (e.g. 1% per trade) or scale size by volatility (often via ATR). Good sizing controls drawdown and prevents a losing streak from being catastrophic. It is as important to long-term results as the entry signal itself.
Related terms
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