Position size refers to the amount of a financial asset that a trader buys or sells in a single trade. Managing position size is essential for controlling risk, as it determines the potential profit or loss from market movements. Calculating the correct position size relative to your risk tolerance ensures you don’t expose yourself to excessive losses.
How to Calculate Position Size
Position size is determined by considering how much of your account you are willing to risk on a trade and the distance to your stop-loss. The basic formula for calculating position size is:
Position Size = Account Risk/Risk per Trade (Stop-Loss)

Account Risk: T...