In trading, “Risk per Trade” and “Position Sizing” are linked concepts. Risk per Trade (RpT) is the strategic, portfolio-level decision. It is a predetermined percentage of total trading capital that a trader is willing to lose on any single trade. For example, a trader with a $25,000 account and a 2% RpT rule has strategically decided the maximum acceptable loss per trade is $500. Position Sizing (PS) is the tactical, trade-level calculation. It is the mechanical process of determining the quantity of an asset to…Continue Reading “Position Sizing and Risk per Trade: How to Protect Your Trading Capital and Grow Accounts”