What % should I risk per trade?

See Risk per Trade — commonly 1-2%.

The sensible stop is far, so I can only buy a few shares — what then?

That's the correct signal: either accept the small size or skip the trade — not move the stop closer to buy more.

Should I size up during a winning streak?

There are dynamic position-sizing methods, but beginners should fix the risk % before considering anything advanced.

Position Size | 2AiTrading

1. What is Position Size

Position size is how much you put into one trade — how many shares, contracts, or lots. It answers "how much is the right amount?"

It's the link few people watch but which largely decides account survival. Many money-management texts consider position sizing the factor with the biggest impact on performance — more than entry selection.

2. Why it matters

Same strategy, same entry and stop, two people with different sizes get completely different outcomes. The one sizing too big can blow the account in a few losing trades — even though the strategy is profitable long-term.
Position size is where a risk percentage turns into a concrete quantity. Without it, "risk 1-2%" is only theory.

3. The core formula

Size is derived from how much you'll lose on this trade and the distance to the stop.

Size = (Money risked on the trade) ÷ (Stop distance per unit)

where Money risked = Capital × risk % per trade (see Risk per Trade).

4. How to apply

1. Set the money you'll lose on this trade (e.g. 1% of a $100k account = $1,000). 2. Determine the stop distance (from the Stop Loss article). 3. Divide (1) by (2) to get size.

The key: keep the money risked fixed, let stop distance determine size. Far stop → smaller size, near stop → larger size — but the money lost if wrong is always the same. This is how you standardize risk across different trades.

5. Worked example

Capital $100k. Risk per trade 1% = $1,000.
Buy a stock at 100, stop at 95.5 → stop distance = 4.5 per share.
Size = 1,000 ÷ 4.5 ≈ 222 shares.

If the stop were only 2.25 away (closer), size would double (~444 shares) but the loss if wrong stays $1,000. That's the point of position sizing.

6. Common mistakes

Same size on every trade regardless of stop distance → risk per trade swings wildly.
Sizing by mood / "confidence" — high confidence, big size: a recipe for a blown account.
Using maximum leverage because "there's buying power left" → one wrong trade loses most of the capital.
Forgetting size depends on the stop — changing the stop without recomputing size.

7. FAQ

What % should I risk per trade? See Risk per Trade — commonly 1-2%.
The sensible stop is far, so I can only buy a few shares — what then? That's the correct signal: either accept the small size or skip the trade — not move the stop closer to buy more.
Should I size up during a winning streak? There are dynamic position-sizing methods, but beginners should fix the risk % before considering anything advanced.

8. Tools

_(Coming)_ Position Size calculator: enter capital, risk %, entry, stop → get size.

9. Checklist

☐ Do I know the money I'll lose on this trade?
☐ Do I know the stop distance?
☐ Is size calculated, not "guesstimated"?
☐ If wrong, does the loss equal my intended risk?