Who this is for — After stop loss and capital: understanding that trade size is not "how strong I feel today," but the quantity that makes monetary risk equal to the plan.
Trade size (position size) is how much you buy or sell: shares, forex lots, futures contracts, crypto units. Together with notional-value and leverage it determines actual market exposure.
In plain terms — Two traders with the same stop can lose very different amounts based solely on size. Size translates your risk-per-trade into units of the instrument.
Size, stop and risk
Basic formula (long):
Risk € = |entry price − stop| × size
So, given risk in euros and the technical stop, size is calculated, not guessed.
| Element | Role |
|---|---|
| Stop loss | Distance to the "wrong" point |
| Risk per trade | How much you are willing to lose |
| Trade size | Units to buy or sell |
Example — Entry 100, stop 97 (risk 3 per share). Maximum trade risk: 60 euros. Size = 60 ÷ 3 = 20 shares. If you buy 200 shares with the same stop, you risk 600 — ten times the plan.
Typical Bronze mistakes
- Fixed size (always 1 lot) regardless of stop and instrument.
- Size after entry — you enter large and then "tighten" the stop to make the numbers work.
- Ignoring leverage — small size but enormous notional-value → liquidation on a small move.
Card
- What it is: quantity of the instrument held in the position.
- When to use it: after defining stop and risk %; never the other way around.
- Typical mistake: huge size with a tight stop "because the market can't go there" — it can.
Bronze path — Module: Risk before profit. Part of bronze-path.
Links
Module: Module 4 — Risk before profit
The first skill of a trader is survival.
