Tag
Position sizing
3 articles
- Trading
What leverage means in trading
Leverage lets a smaller deposit control a larger position. The same price move then changes the deposit by more, and the loss can exceed the deposit itself.
- Trading
What a stop loss does
A stop loss names the price that should close a position. On a stock order, that price triggers a market order, so the actual fill can differ from the stop.
- Trading
Size the loss before the trade
Choose the dollar loss and the stop distance first. Position size is that loss divided by the distance, so a fixed quantity can lose a different amount.