📉☠️ Position sizing: the single most critical skill. I lost $5,400 learning this. Don't repeat my mistake. Always risk 1-2% of your capital per trade.
Let's say you have a $1,000 account. Your max loss per trade is $10 (1%). You find an entry at $25, with a tight stop loss at $24.80. That's a $0.20 risk per unit. To figure out your position size, simply divide your max risk by the risk per unit: $10 / $0.20 = 50 units. You'd open a 50-unit position.
This rule prevents blowups. Even if you have 10 losing trades in a row, you've only lost $100 (10%). Your account is still 90% intact. Without it, one bad trade can wipe you out, as I learned the hard way. Make this calculation before *every single trade*. It's your survival guide.
#FuturesTrading #RiskManagement #PositionSizing #TradingTips
Let's say you have a $1,000 account. Your max loss per trade is $10 (1%). You find an entry at $25, with a tight stop loss at $24.80. That's a $0.20 risk per unit. To figure out your position size, simply divide your max risk by the risk per unit: $10 / $0.20 = 50 units. You'd open a 50-unit position.
This rule prevents blowups. Even if you have 10 losing trades in a row, you've only lost $100 (10%). Your account is still 90% intact. Without it, one bad trade can wipe you out, as I learned the hard way. Make this calculation before *every single trade*. It's your survival guide.
#FuturesTrading #RiskManagement #PositionSizing #TradingTips