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Position sizing: how much to put into one trade
Choosing what to buy gets all the attention, but choosing how much matters just as much. Here is a simple rule careful traders use.
Updated Oct 31, 2026
Basahin sa FilipinoWhat is position sizing?
Your position is how much you put into one trade. Sizing it means deciding that amount on purpose, so one bad trade can never sink your whole account.
What is the 1–2% rule?
Many traders never risk losing more than 1–2% of their whole account on one trade. With a $10,000 account, that is $100 to $200.
| Account | Risk 1% per trade | Risk 2% per trade |
|---|---|---|
| $1,000 | $10 | $20 |
| $10,000 | $100 | $200 |
| $100,000 | $1,000 | $2,000 |
Risking 1% means even 10 losing trades in a row only cost about 10% of the account.
Risking $100 means I only buy $100?
No. Risk is how much you would lose if your stop-loss is hit, not how much you buy. The trade size comes from where your stop is.
- 1Decide your risk: $100 (1% of $10,000).
- 2Decide where you would sell if wrong: 10% below what you pay.
- 3Divide: $100 ÷ 10% = $1,000 to buy.
- 4If the stop is hit, you lose 10% of $1,000: exactly $100.
How does the stop distance change the size?
Same $100 risk; a tighter stop allows a bigger trade, a wider stop a smaller one.
| Stop below your price | Trade size for $100 risk |
|---|---|
| 5% | $2,000 |
| 10% | $1,000 |
| 20% | $500 |
How do I practise this on Tradeground?
- 1Pick your risk per trade, like 1% of your practice cash.
- 2Decide your sell-if-wrong price before buying.
- 3Work out the size and type it in the Practice order box.
- 4Keep to it for a few weeks and compare with trading by feel.