Position Sizing for Day Trading

Understand the idea

Position size connects the distance to your stop with the amount you intend to risk. For a futures example, planned risk per contract equals stop distance in ticks multiplied by tick value. Divide the risk budget by that amount and round down to whole contracts.

A decision to think through

Suppose the exercise allows $100 of planned risk and each contract risks $40 at the chosen stop. Two contracts use $80; three use $120 and exceed the budget. Fees and slippage can increase an actual loss.

Try it through free practice

Choose the invalidation point before calculating size. If the smallest tradable unit is too large, skipping the trade is an available decision.

• Explain the evidence available before the outcome.
• Read the feedback and identify one change to your process.
• Revisit the decision later and check what you remember.

Your next free learning challenge

Play the free risk-sizing game. Make five decisions, read the explanation after each answer, and try to state the condition in your own words. First-time correct decisions earn skill XP; later reviews check what you remember. You can then apply the idea in a chart round and inspect the replay. All games, levels, written lessons, and feedback are free, with no signup or real money.