Risk and Planning

Module 13 — Position Sizing Fundamentals

Position size on gold is calculated, never estimated.

Account risk in money = balance × risk percentage.
Stop distance = entry price minus stop price, in the units your broker quotes.
Value per unit of movement = taken from your broker's contract specification.
Position size = account risk ÷ (stop distance × value per unit).

Key concepts

Position size is calculated
Contract value must be verified
Money risk connects stop and size

Practical example

A trader checks the broker specification, calculates loss at the stop, and reduces volume until it fits the risk limit.

Common mistake

Copying a lot size from another trader or broker account.

Knowledge check

Check your understanding

1. Which statement best captures position sizing fundamentals?

Use your own account specification and defined money risk.Copying a lot size from another trader or broker account.The outcome is guaranteed when the pattern appears.Context and risk can be ignored.

2. Which action best reflects the disciplined approach from this lesson?

Use your own account specification and defined money risk.Copying a lot size from another trader or broker account.Act first and review the context afterwards.Increase exposure when uncertain.

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