Position sizing: the part beginners skip
August 2026 · 8 min read
Most new traders pick a position size by guessing, or by copying whatever lot size looks impressive in a screenshot. Position sizing should instead come from a single number: how much of your account you're willing to lose on this trade.
A common rule is to risk 1–2% of account equity per trade. From there, the size is math: risk amount divided by the distance from entry to stop-loss, adjusted for the pair's pip value.
Sizing this way means a losing streak, which will happen, shrinks your account slowly instead of wiping it out. It also removes the temptation to size up after a loss to 'win it back', which is how most blown accounts actually happen.
This article is educational and does not constitute financial or investment advice. See the full risk disclosure.