Position Sizing

How much to buy so no single trade can hurt you.

1. The 1% Risk Rule — Why many traders risk only a small slice of their account on each trade, what “risk” really means here, and how a small number keeps you in the game.
2. Stop Distance & Share Count — The simple formula that turns your risk budget and stop distance into the right number of shares, with worked examples and common pitfalls.
3. Sizing for Volatility — Why a calm stock and a wild stock shouldn’t get the same number of shares, and how the average true range turns volatility into a sizing rule.
4. Portfolio Heat — How to add up the risk across all your open positions, why too much “heat” is dangerous, and simple limits that keep a bad day from becoming a disaster.
5. Scaling In & Out — How to build a position in stages and take profits in pieces, why many traders add only to winners, and how to keep total risk under control while you do it.
6. Concentration vs. Diversification — How many positions to hold, the trade-off between focusing on your best ideas and spreading risk, and how to find a balance that fits your goals.