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Module C · Risk Management·Lesson 1

Position Sizing

Calculate the right trade size to protect your account

4 sections · 3 quiz questions · ~5 min read

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The 1-2% Rule

Never risk more than 1-2% of your account on a single trade. With a $10,000 account and 2% risk, your maximum loss per trade is $200. This ensures no single trade can devastate your account.
$10,000AccountRisk: $200Safe: $9,8002% Risk Per Trade

Calculating Position Size

Position Size = (Account Risk $) ÷ (Stop Loss in Pips × Pip Value). If you risk $200 with a 40-pip stop on EUR/USD, you'd trade 0.5 standard lots ($200 ÷ 40 pips ÷ $10/pip = 0.5 lots).
Wick holds a small scoop of coins labeled 2% = $10 next to a jar labeled $500 account, showing that one trade only risks a small slice of the account.Small accounts need microlots$500account2% = $10
Wick saysOn a $500 account, 2% risk is only $10 a trade, so size with micro lots.

Account Size Matters

A $500 account at 2% risk means only $10 per trade — you'll need micro lots. A $50,000 account at 1% allows $500 risk. Match your lot size to your account. Overleveraging small accounts is the #1 killer.
Wick shows a calculator reading 0.5 lots under the formula $200 divided by 40 pips divided by $10, teaching how to work out position size from your stop.$200 ÷ 40 pips ÷ $10 =0.50.5 lots
Wick saysSize = risk in dollars ÷ stop in pips ÷ pip value. $200 with a 40-pip stop is 0.5 lots.

Consistency Is Key

Use the same risk percentage on every trade. Don't risk 1% on normal trades and 10% on "sure things." Consistent position sizing is what separates professionals from gamblers. Trust the math, not emotions.
Wick shows a green card for the same risk percent on every trade and a coral card for sizing up when you feel sure, teaching consistent position sizing.Do thisSame risk % onevery tradeNot thisBig size when youfeel sure
Wick saysUse the same risk percent on every trade, even when a setup feels extra good.
Quick check

Did it stick?

Try to answer each one before you peek at the explanation.

1

With a $10,000 account and 2% risk rule, what is your max loss per trade?

2

It's acceptable to risk 10% on trades when you're very confident.

3

Position Size = Account Risk ÷ (Stop Loss × ?)