Position sizing & risk per trade
The same entry signal can be a disaster or a winner depending on how you size and where you stop. Position sizing is quietly the biggest lever on the shape of your equity curve.
Risk a fixed fraction, not a fixed quantity
Professional sizing risks the same small percentage of equity on every trade, say 1%. Because your stop defines how far price can move against you, the stop distance sets the position size automatically: wider stop, smaller position, same dollar risk. This is also the engine's default when you say nothing about size.
Volatility aware stops
A fixed 5% stop is too tight for a wild market and too wide for a calm one. An ATR stop places the stop a multiple of the market's typical range away, so risk stays consistent across assets and regimes. This example risks 1% with a 2x ATR stop.
Feel the drawdown
Run this, then find Position size in the parsed strategy. It reads 1% risk per trade. Change it to 3%, run again, and watch how sizing, not the entry, controls the depth of the drawdown you'd actually have to survive. The entries are identical in both runs. A great signal you can't hold through its drawdown earns you nothing.
Run it live
The strategy for this lesson, in plain English:
“Buy BTC on a MACD bullish cross, risk 1% per trade with a 2 ATR stop and a 3:1 take profit, on 1D, last 3 years.”
It opens already parsed, so you can read the rules before you spend a run.
Key takeaway
A mediocre edge with great risk control beats a great edge you can't hold through the drawdown.
Terms in this lesson
Check yourself