Glossary
Position sizing
Position sizing is deciding how much to risk on each trade, usually as a fixed percentage of account equity — commonly between 0.5% and 2%. It is the primary lever of risk control: sizing determines whether a normal losing streak is a survivable dip or a blown account, regardless of how good the strategy is.
Sizing converts strategy math into account outcomes. The same system risking 1% per trade produces a smooth equity curve; risking 10% per trade it produces ruin, because losing streaks of five or more trades are statistically routine for any realistic win rate.
A journal reveals your actual sizing behavior — including the silent size creep that follows winning streaks — which frequently differs from the rule you believe you follow.
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