Position sizing and the 1% rule

Most accounts don't blow up because of bad analysis. They blow up because of one oversized trade. Position sizing is the fix, and it's the most important skill in trading.

The 1% rule

Risk no more than 1% of your account on any single trade. On a €10,000 account, that's €100 of risk. Your position size is then derived from your stop distance, not the other way around.

How to size a trade

1. Decide your entry and your stop loss.
2. Your risk in € = 1% of the account.
3. Position size = risk ÷ (distance to stop). A wider stop means a smaller position, same €100 risk.

This flips the usual mistake: instead of picking a lot size and hoping, you fix the loss first. A losing streak of ten trades costs you ~10%, survivable. At 5% per trade, the same streak is catastrophic.

A position-size calculator that starts from your account and stop takes the emotion out; it's built into TradeDiscipline's pre-trade flow.