Orders & trading
What is Position sizing?
Hinglish mein padhein: Position sizing kya hota hai?
Position sizing decides how many shares to buy so that, if your stop-loss hits, you lose only a planned slice of your capital.
A common rule is to risk no more than 1–2% of capital on one trade. Quantity = amount you are willing to lose ÷ (entry price − stop price).
Good sizing matters more than finding perfect entries — it keeps one bad trade from ruining an account.
Example
Capital ₹2,00,000, risk 1% = ₹2,000. Entry ₹500, stop ₹480, risk per share ₹20 → buy 100 shares.
Related terms
- Stop-loss orderA stop-loss order automatically exits a position when the price reaches a trigger level, to cap the loss on a trade.
- Risk-reward ratioThe risk-reward ratio compares how much you could lose (entry to stop-loss) with how much you aim to gain (entry to target).
- LeverageLeverage lets you control a position larger than your own money. It multiplies both gains and losses.