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โ† Glossary ยท Risk and markets

Position size

How much money you put into a single share.

Position size determines how much you invest in a single security, and with it how hard a mistake hits your overall wealth.

A common approach: first decide what percentage of your portfolio you are willing to lose on a single trade, say 1 %, then use the distance to the stop to work out the position size. If the stop is 8 % below entry and you want to lose at most 100 โ‚ฌ, that gives a position of about 1,250 โ‚ฌ.

Related terms

Not investment advice. Investing carries risk up to total loss.

Position size โ€“ Glossary ยท DipCatcher