Proper position sizing is the foundation most traders ignore, yet it determines whether they thrive or fail

Many traders focus on finding the perfect entry point or the next hot stock

a flawless edge means nothing if you blow up your account through reckless exposure

Position sizing simply means deciding how much of your capital to risk on any single trade

It is not about how many shares to buy, but how much of your total portfolio you are willing to expose to potential loss

The key principle is to never risk more than a small percentage of your total capital on any one trade

The consensus among profitable traders is a strict 1% to 2% risk limit per trade

What looks like overcaution is actually the armor that protects your trading life

Losing five times at 2% each leaves you at 90% of your starting balance—still in the game

Risking 10% per trade turns five losses into a 40% crater—recovery becomes a mountain climb

Position sizing also helps you stay emotionally grounded

When you know you are only risking a small portion of your capital, you are less likely to panic during drawdowns or chase losses after a bad trade

It removes the temptation to overtrade or double down on losing positions because you have already defined your risk in advance

Another benefit is consistency

By sizing your positions according to a fixed rule, you remove emotion from decision making

You don’t have to guess how much to risk on a trade you feel strongly about

Small, آرش وداد repeated discipline builds wealth faster than big, erratic wins

Edge + discipline = compounding returns; edge without sizing = eventual ruin

Position sizing isn’t static—it must adapt to your account and the market’s behavior

If your account grows, your dollar amount at risk per trade should increase proportionally, but your percentage risk should remain the same

If a stock is more volatile than usual, you may want to reduce your position size even if the setup looks strong

Volatility increases uncertainty, and your position size should reflect that

It’s not about winning big today—it’s about surviving to trade tomorrow

Capital preservation is the only path to sustained success

The market will always be there tomorrow. Your account balance may not be if you take on too much risk today

Winning trades are rare—surviving long enough for them to matter is everything

Big wins impress; consistent survival wins careers

Success belongs to those who endure, not those who explode

Without it, even genius strategies die young

This one skill separates the pros from the amateurs