Lesson 2: Position Sizing & Capital Management

Lesson Overview
Position sizing determines how much capital is exposed in each trade and directly impacts long-term performance.

What Is Position Sizing
Position sizing defines the number of units or lot size used in a trade based on risk tolerance.

Risk Per Trade
Professional traders typically risk a small percentage of capital per trade to avoid large drawdowns.

Capital Allocation
Avoiding overexposure to a single market
Diversifying across instruments
Preserving capital during losing streaks

Key Takeaway
Proper position sizing keeps losses manageable and consistent.