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Risk and position sizing

How big to trade, and how to survive losing streaks.

• Position sizing
  Picking how big a trade is, based on how much you are willing to lose.
• Risk per trade
  The share of your account you are willing to lose on one trade.
• Risk of ruin
  The chance that losses shrink your account so far you can't continue.
• Kelly criterion
  A formula for the bet size that grows money fastest in theory, if you know your true odds.
• Correlation
  How much two markets tend to move together.
• Paper trading and demo accounts
  Practising with fake money before using real money.
• Trading costs
  What you pay to get in and out of a trade, and why a tight stop leaves costs a bigger bite of your risk.

Education only, not financial advice. No signals. Backtests are hypothetical: real trading can be worse. Past results don't predict future results.