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Position Sizing Formula — How Much to Risk Per Trade?
Size = (Total Capital × 2%) / (Distance to stop loss %). Never risk more than 2% per trade.
Position sizingRiskMoney managementTrading
The 2% Rule
Risk 2% of your capital per trade.
Capital 10M → risk 200k per trade.
Formula: Risk = Capital × 2% / (Stop loss %)
Example:
- Capital: 10M, Stop loss 2% below entry
- Risk per trade: 10M × 2% / 2% = 1M position
Result: 4 losing trades in a row = 8% loss. You can survive.
Sizing by Account Risk
| Account | Risk per Trade | Max Loss (10 trades) |
|---|---|---|
| 10M @2% | 200k | 2% (bearable) |
| 10M @5% | 500k | 5% (still ok) |
| 10M @10% | 1M | 10% (painful) |
| 10M @20% | 2M | 20% (ruin) |
Common Mistakes
Too large: 10M account, 5M trade size → 1 loss = 50% drawdown → can't recover easily.
Too small: 10M account, 10k trade size → friction costs too high, rewards negligible.
Consistency Beats Size
20 trades × 2% = +40% if 60% win rate. 5 trades × 10% sizing = +20% if win once. But one loss = -50%. Disaster.
Consistent small sizing > occasional large wins.
fastbot Auto-Sizing
Set % risk → fastbot calculates position size automatically based on stop loss.
👉 Use fastbot position sizing — professional risk.