Position Sizing
Position sizing is the process of deciding how many units, shares or lots to trade so that a single position risks only a pre-defined amount of capital.
Position sizing converts a risk budget into a trade quantity: decide the rupees you are willing to lose, divide by the loss one unit would take at the stop, and round down to whole lots. Fixed-fractional, fixed-rupee and volatility-based (ATR) schemes are the standard methods, and sizing on risk — never on available margin — is what keeps a losing streak survivable. On AlgoTradeGyan the engineering half lives in the position-sizing engine and risk engine pages; the concept itself — every method, formula and worked example — is maintained at its canonical home on RiskManagementGyan, the network's risk authority.
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Position sizing
Canonical explainer on RiskManagementGyan.
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Related on AlgoTradeGyan: Risk per Trade · Capital Allocation · Portfolio Heat · Stop-Loss Concepts · Position Sizing (Engine) · Maximum Drawdown
Published 10 July 2026 · Updated 17 July 2026. This page is a summary; the canonical, maintained treatment of Position sizing lives on RiskManagementGyan. Educational content only — not investment advice.