【Position size isn’t determined by gut feel】
Suppose you have 10,000 yuan in trading capital and plan to risk no more than 100 yuan on a single trade. If the distance between your entry price and stop-loss price is 5%, your spot position should be about 2,000 yuan—not the full 10,000 yuan.
Formula: Position size ≈ acceptable loss ÷ stop-loss distance percentage.
This is a planning tool, not a guarantee against losses: fees, slippage, and price gaps can all increase losses. For highly correlated positions, calculate their risks together. Set your exit conditions first, then think about profit targets.
#RiskManagement
Suppose you have 10,000 yuan in trading capital and plan to risk no more than 100 yuan on a single trade. If the distance between your entry price and stop-loss price is 5%, your spot position should be about 2,000 yuan—not the full 10,000 yuan.
Formula: Position size ≈ acceptable loss ÷ stop-loss distance percentage.
This is a planning tool, not a guarantee against losses: fees, slippage, and price gaps can all increase losses. For highly correlated positions, calculate their risks together. Set your exit conditions first, then think about profit targets.
#RiskManagement