Everyone obsesses over finding the next perfect entry. That breakout...
Trading King@tradingking
2 days ago
Everyone obsesses over finding the next perfect entry. That breakout pattern, that golden cross, that chart that screams "buy."
Nobody wants to talk about the math that keeps you alive when you're wrong. And you will be wrong. Often.
Position sizing is the unglamorous science of not blowing up. It's what separates traders from gamblers who just got lucky once.
Think of it like this: You're at a Lagos suya spot. You could put all your money on one skewer hoping it's the best meat ever. But if it's burnt or undercooked, you eat alone and angry with no cash left.
Smart move? Buy a little bit from four different spots. One might be average. One might be fire. You survive to eat another day.
In trading terms: never risk more than 1-2% of your total account on a single trade.
Example: You have a 1 million naira account. You see a stock at 100 naira with a stop loss at 95. Your risk per share is 5 naira. 1% of your account is 10,000 naira. So you buy 2,000 shares max.
That's it. No excitement. No thrill. Just boring math that keeps you trading next month.
Beginners tip: Before you place any trade, calculate your maximum loss first. If it makes you uncomfortable, size down. Your future self will thank you.
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16 hours ago
