Trading glossary
Position Sizing
Position sizing is the calculation of how many units or lots to trade based on account equity, risk per trade and the distance to your stop loss. The most common method risks a fixed percentage of equity per trade, typically 0.5% to 2%. Position sizing is what separates survival from ruin: two traders with the same entries and exits can have completely different results purely because of how much they risk. A journal helps you check that your actual position size matched your intended risk, and Traders Vault records size, P&L and risk per trade so rule breaks become visible.
What is Position Sizing in trading?
Position sizing is the calculation of how many units or lots to trade based on account equity, risk per trade and the distance to your stop loss. The most common method risks a fixed percentage of equity per trade, typically 0.5% to 2%. Position sizing is what separates survival from ruin: two traders with the same entries and exits can have completely different results purely because of how much they risk. A journal helps you check that your actual position size matched your intended risk, and Traders Vault records size, P&L and risk per trade so rule breaks become visible.