What is position sizing?
How many shares or contracts you take, decided by what the trade is allowed to cost you.
How many shares or contracts you take, decided by what the trade is allowed to cost you.
Position sizing, explained
Size is the one part of a trade you fully control. Price does what it does; the number of shares is yours. Work backwards — settle the money you are willing to lose, measure the distance from your entry to your stop, and divide the first by the second.
A worked example
You will risk $200. Entry $50, stop $46, so $4 is at risk per share. $200 ÷ $4 = 50 shares.
Where position sizing shows up in a journal
A trading journal is where this stops being a definition and becomes your own number. sizeforzero computes it from the trades you import or log, alongside the rest of your analytics vocabulary, and every figure in the app carries an (i) that explains it in the same plain English you just read.