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Risk

Position sizing

Choosing trade size so that the stop distance costs exactly your risk budget.


Position size is calculated, not chosen by feel: risk amount divided by (stop distance in pips × pip value per lot) gives the lot size that makes a stop-out cost precisely your intended risk.

This is the mechanism that lets stop placement be driven by the chart rather than by comfort. A wider stop is not riskier when size compensates; it is simply a smaller position on a more sensible level.

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