How to Calculate Position Sizing & Risk Per Trade - Any Trade, Any Market ✔️

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If you have GBP10,000 of capital, if you risk 2% then you risk GBP200 per trade.
If your stop loss is 50 pips then you can trade at GBP4 [GBP200 divided by 50] per point.
Always work from the market conditions at the time and don't decide the stake/trade amount before working out the stop loss. If you use a tighter stop you could be simply increasing the risk as there's more likelihood that your stop would be taken out.
N.B: Always work back from your stop, not the other way round.

Related Video
Should You Constantly Adjust Your Risk %? 🤔 Risk Per Trade?

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[josespul]

i think you missed to mention the position size, how much lot should we place? how to calculate it?

[thumbliner]

Most important and valuable video on this channel. Underrated.

[ejamas]

Great explanation, and great teaching. My only concern is that a stop loss does not warranty an exit at a given price but a signal to sell. And the order will be filled at whatever price the stock is currently trading. You can put a stop lost at 20 pips below the current price, but be out at 40 pips. In that case, you loss is more than anticipated.

[hunterx]

Finally somebody understand what are they saying! Clear explanation:)

[chandlervincent]

Exactly what I was looking for!! Thanks

[jameswaldner]

hey people listen, I'm a slow learner. Have tried to understand this risk management thing from different mentors and didn't fully get it! this video just opened my eyes! Use this with 3:1 Ratio and we will grow our account!!!!

Thanks again @UKspreadbetting / Mark! cheers.

[Future_Presido]

Love you man you break everything down to my understanding than other traders ❤

[mexicanjumpingbear]

I don’t know where I keep going wrong… so I have an account size of $1000, at 2% risk that leaves me with $20. The distance from my stop loss to entry price is 101 units or .34%. So 20$/101 = .19 BTC or $20/.34% = 5, 882 …. How is it possible to get a position size larger than my total account capital? Where am I going wrong? Does this just mean I can use 100% of my trading capital?

[ambabdirashiidragos]

I watched many of his videos best teacher

[RodwellSibanda]

After watching a few videos on this topic this is by far the best and most simplified i have seen thank you so much

[raymondz]

You missed the most important part of this tutorial, how to calculate the position size.

[superaiky]

quite complicated explanation :) cheers

[quincybaker]

Tradingview, Papertrade account. In the long position tool, my quantity displayed on the tool appears in 9-10 digit numbers. Is this a problem? How do I convert this to lot size, do I divide the entire 9-10 digit number by 10, 000?

[igorgrytselyak]

How you calculate number of pips?Why 50?

[lasjames]

50 pips because that's what the pretend chart said had a support line. So the number of pips depends on your stock.
his point is to FIRST see the pips THEN calculate how many shares you can afford without being too risky.. but most beginners flip it around

[BOXINGUNLOCKED]

Is this based on zero leverage? I’m a little confused by leverage, if for talking sakes it’s leveraged at 10-1, would your 2% risk on the charts actually be £2000?

[paulmckevitt]

Hi, Great video. Is this the same principle for calculating a trade in gold, silver, oil, the S&P, indexes in general? Thanks

[juanandresberrizbeitia]

What would be your account size if I keep positions overnight? In my first trade yes, the buying power is my account size but if I keep using my buying power as my account size my positions get diluted sizewise overtime. What would be the best way to calculate my account size at the beginning of every trade ? Thanks

[zechariahmallard]

do you put your full account in one trade for example $100 in the trade and 1% stop loss