Position sizing is the difference between a strategy that survives a bad week and one that does not. The good news: it is one line of arithmetic.
The formula
Position size = (Account risk in $) / (Stop distance x Value per unit)
Everything else — win rate, expectancy, target — sits downstream of this. On a $50,000 evaluation risking 0.5% per trade, your account risk is $250. If your stop is 25 pips on a pair worth $10 per pip per lot, that is 0.25 lots. Not "one lot because it feels right".
Why a fixed percentage beats a fixed lot
A fixed lot size means your risk swings with volatility: the same 1.0 lot can cost you $80 on a quiet day and $600 during a news spike. A fixed percentage keeps the damage constant no matter what the instrument is doing, which is exactly what a drawdown rule rewards.
Tie it to the firm's limits
On a MixFunded account the daily floor is 3%. If you risk 0.5% a trade, you can be wrong six times in a row before the day ends you — enough room for a normal losing streak. Risk 2% a trade and one bad hour is fatal.
- 0.25% per trade — 12 consecutive losses before the daily floor
- 0.5% per trade — 6 consecutive losses
- 1% per trade — 3 consecutive losses
- 2% per trade — 1 bad trade and the day is done
Scale up slowly
Traders who scale size after a green week and cut it after a red one end up sizing largest exactly when they are least sharp. Change your risk percentage on a schedule — monthly, based on results — not on emotion.
Run your own numbers in the risk calculator and drawdown simulator before your next session.