Position sizing
Risk & psychologyDetermining trade quantity from a fixed risk amount and the distance to the stop-loss.
In plain terms
Decide what you will lose first. Quantity is arithmetic after that.
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Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Position sizing by conviction
Risk & psychologySetting the size of a holding from how well the business is understood and how strong the evidence is, rather than weighting every idea equally.
In plain terms
The honest version cuts both ways: a thesis you can barely defend gets a size that can go to zero without mattering.
Gap risk
Risk & psychologyThe risk that a security opens far beyond your stop level, with no trading in between.
In plain terms
The reason position sizing, not the stop-loss, is your real risk control.