You can be right 70% of the time and still go broke if you size trades wrong. Professional traders obsess over position size first, entry price second. Here's the math that keeps accounts alive.
Never risk more than 1% of your total account on a single trade. Account: ₹1,00,000. Max risk per trade: ₹1,000. This means even 10 losing trades in a row only costs you 10% of your capital, not your whole account.
Formula: Position size = (Account × Risk %) ÷ (Entry price − Stop-loss price). Example: ₹1,00,000 account, 1% risk = ₹1,000. Entry ₹100, stop-loss ₹95 (5% away). Position size = ₹1,000 ÷ ₹5 = 200 units.
It feels slow. Sizing down means smaller wins too, and that's psychologically hard when you're excited about a trade. But the traders who last 5+ years all do this — the ones who don't, blow up within a year.
A trader risking 1% per trade can survive a 20-trade losing streak with 80% of capital intact. A trader risking 10% per trade is wiped out after 10 losses. Survival is the entire game — sizing is how you survive.
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