65-Day Academy · Day 33 · Risk & Position Sizing
M5 Checkpoint — Size the Trade
The integration
Risk is one connected system: 1% budget → structural stop → position size → expectancy check → drawdown tolerance → volatility adjustment. Every piece feeds the next; the checkpoint exercises the chain end-to-end.
What the grader looks for
Reasoning that connects sizing to a structural stop and an expectancy/RR judgment — not just arithmetic. "80 shares because the formula says so" is incomplete; "80 shares because the invalidation is $10 away, the target is 2.5R, and the account can absorb the streak" is the discipline.
What you'll practise
Account $120,000. Setup: entry $75, structural stop $69 (below the higher low), target $90. Risk 1%. How many shares, and what R is the target?
25 XP in the app · intermediate
Sources
- Trade Your Way to Financial FreedomVan K. Tharp
- Position SizingInvestopedia
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All lessons are for educational purposes only and are not individualized financial advice, a recommendation, or a solicitation to buy or sell any security. Options involve substantial risk and are not suitable for every investor.