Question 1

What is position sizing in trading?

Accepted Answer

Position sizing is the process of determining how many shares or contracts to buy or sell based on your risk tolerance and stop loss level. It ensures you never risk more than a predetermined percentage of your capital on any single trade.

Question 2

What is the R-multiple in trading?

Accepted Answer

R-multiple is a way to measure your trading results in terms of your initial risk (R). If you risk ₹1000 and make ₹2000, that's a 2R gain. This standardizes results across all trades regardless of position size.

Question 3

How much should I risk per trade?

Accepted Answer

Most professional traders recommend risking 1-2% of your total trading capital per trade. Beginners should start with 1% or less until they develop consistent profitability.

Position SizingMastery