Think Like a Risk Manager
You can state the most you are willing to lose on an idea before you look at the upside.
Lesson objective
Be able to calculate a position size before you look at potential profit, and explain how cash-account settlement rules limit how often you can trade.
Preview
Beginners ask how much a trade could make. Builders ask what it could cost and whether they could survive that outcome repeatedly. This lesson puts the loss number first and shows why every other decision follows from it.
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Related download
Pre-trade risk worksheet
Saved in this browser as a study aid. Completing lessons is not a licence, a certification, or permission to skip your broker's rules.
Risk reminder
Never size a position by 'how much buying power is showing.' Buying power can include funds that have not settled. Size from your risk limit, and confirm settled cash before entering.
Education only. This lesson is not financial advice, a trade signal, or a promise of results. Test in paper first, size every idea by what you can afford to lose, and remember that you control your own broker account and your own decisions.