Calculate the exact number of shares or units to trade based on your account size, risk percentage, and stop loss distance.
Position size = (Account Balance × Risk %) ÷ (Entry Price - Stop Loss Price). This ensures each trade risks the same percentage of your account regardless of the stock price or stop distance.
A 50% drawdown requires a 100% gain to recover. At 1% risk per trade, 10 consecutive losses cost you only 9.6%. At 5% per trade, that same streak costs 40%. Position sizing is the difference between a recoverable setback and a blown account.