📚 Trading Lesson 5: Position Sizing – The Secret to Long-Term Survival 🛡️💸

Most traders fail not because their analysis is wrong, but because they bet too much money on a single trade. In Lesson 5, we focus on the most important math in trading: How much to invest.

📉 The Problem: Over-Leveraging

If you have $1,000 and you put $500 into one trade, a small market move against you can wipe out 50% of your account. This is gambling, not trading. To stay in the game, you must control your size.

💡 The Solution: The 1% Rule

Professional traders rarely risk more than 1% to 2% of their total account balance on a single trade.

How to calculate your Position Size:

Total Capital: Let's say you have $1,000.

Risk Amount (1%): You are only willing to lose $10 if the trade goes wrong.

Stop-Loss Distance: Imagine your SL is 5% away from your entry price.

The Calculation: $10 ÷ 0.05 = $200.

By investing $200, if the market hits your Stop-Loss, you only lose $10. You still have $990 left to trade again.

✅ Key Benefits of Proper Sizing:

Emotional Control: You won’t panic during market dips because your potential loss is very small.

Survival: Even if you lose 5 trades in a row, you still have 95% of your capital.

Consistency: It turns trading into a professional business rather than a lucky guess.

📢 Struggling with the math? Don't risk your hard-earned money by guessing! Before you open your next position, comment below or contact Technical-tradrS-68. I will help you calculate the perfect size for your trade!

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