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 โฌ, that gives a position of about 1,250 โฌ.
