Glossary/ Risk
Risk
Position sizing
Deciding how much to buy, from your capital and your stop distance rather than from conviction.
Where this comes up
Lessons that use the term in context, which is usually more useful than the definition on its own.
- Expectancy over a hundred trades — Hit rate and reward-to-risk, turned into one number.
- The arithmetic of a drawdown — Why a 50% loss needs a 100% gain, and what that means for size.
- Risk of ruin — The probability nobody calculates before they need it.
Nearby terms
Reward to risk · Risk of ruin · Slippage · Stop loss · Average down · Backtest