Position sizing, done properly.

Many traders decide the size first, often a round number that feels right, and then place the stop wherever the loss feels bearable. That puts the stop in the wrong place: it is set by the size of the trade instead of by the market.

Position sizing reverses the order. The stop goes where the trade idea is proven wrong, for example beyond the swing low you are buying above. The risk per trade is fixed in advance, usually as a small percentage of the account. The size is whatever makes those two things agree.

The result is that every trade risks the same amount, whether the stop is tight or wide. A wide stop gets a smaller position; a tight stop gets a larger one.

There are two common ways to fix the risk. Fixed fractional sizing risks the same percentage of the current balance on every trade, so the risk amount shrinks after losses and grows after wins. Fixed dollar sizing risks the same cash amount each time, which is simpler to track but does not adapt as the account changes. Both work; what matters is that the number is decided before the trade, not during it.

Risk amount = account balance x risk per trade (%)
Position size = risk amount / loss per unit if the stop is hit

The loss per unit depends on the instrument. For a futures contract it is the stop distance in ticks multiplied by the value of one tick. For a currency pair it is the stop distance in pips multiplied by the value of one pip at your size. When size is expressed as a notional amount in dollars, as it is in Mizora Pro, it is simplest to think of the stop as a percentage of the entry price:

Notional size = risk amount / (stop distance / entry price)

Illustrative example. The numbers are round figures chosen to make the arithmetic easy, not a recommendation.

• Account balance: $50,000.
• Risk per trade: 0.5 percent, so the risk amount is $50,000 x 0.005 = $250.
• Entry: a long at a price of 100.
• Stop: at 98, just below the swing low that defines the idea. The stop distance is 2, which is 2 percent of the entry price.
• Notional size: $250 / 0.02 = $12,500.

Check it: a $12,500 position that falls 2 percent loses $250, exactly the planned risk. If the stop had been at 99 instead, 1 percent away, the size would double to $25,000 for the same $250 risk. If it had been at 96, 4 percent away, the size would halve to $6,250.

With a target at 106, the trade risks 2 to make 6, a reward-to-risk ratio of 3. That is a separate decision from sizing, but the two belong together: sizing fixes what you lose when wrong, and the target sets what you make when right.

Even a sound approach has runs of losses. The size of each loss decides whether a bad run is an inconvenience or the end of the account. Simple arithmetic shows why: ten losses in a row at 1 percent of the current balance leave about 90 percent of the account. Ten losses in a row at 5 percent leave about 60 percent.

Recovery is also harder than the loss. A 10 percent drawdown needs about an 11 percent gain to get back to even; a 50 percent drawdown needs 100 percent. That asymmetry is the main reason traders keep risk per trade small and consistent.

Account rules add another layer. Many accounts, including evaluation-style accounts, have a daily loss limit and a maximum drawdown. Sizing should keep a normal losing day well inside those limits, with room to spare.

A common mistake is raising size after a loss to win the money back quickly. It breaks the whole method: the next loss is larger, at exactly the moment judgement is weakest. Many traders do the opposite and cut their risk per trade after a set number of losses or a set drawdown, then restore it once the account recovers.

A stop that is tighter than the market's normal noise gets hit by random movement. Many traders use the average true range (ATR) as a guide, placing the stop a multiple of ATR beyond the level that defines the trade. When volatility rises, ATR widens, the stop widens and the size shrinks automatically. The same logic works across markets: crypto and crude oil usually need wider stops, and therefore smaller notional size, than a major currency pair.

Also watch correlation. Long NQ and long ES at the same time is close to one trade taken twice, so the combined risk is roughly double what each position suggests.

• Risk presets on the ticket. Size buttons can risk 0.25, 0.5, 1 or 2 percent of the account, as well as 10, 25, 50 or 100 percent of buying power.
• Position-size calculator. The Tools tab sizes a trade from a stop set by ticks, percentage, price or ATR, with an edge calculator for win rate and reward-to-risk. ATR 14 is also in the key-levels panel.
• The limit on the chart. The risk manager draws a DAILY LIMIT or MAX LOSS line at the price where the account would breach, previewed as you hover Buy or Sell, with a rules panel showing daily loss room and the drawdown floor.
• Brackets. Enter at market with the stop loss and take profit set in ticks in one action. Order types.
• Review. The track record shows win rate, profit factor, expectancy and maximum drawdown, so you can see whether your sizing is working.

Mizora Pro also has an order flow workspace for reading entries; it is in Beta and modelled from live prices, not exchange depth. Practise all of this on a free $50K practice account. Mizora Pro accounts trade simulated capital.