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Academy

Position Sizing for Challenge Accounts

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Position sizing is one of the most important habits in a challenge environment. A good setup can still become a bad trade if the size is too large for the account rules.

Before entering any trade, define the maximum amount you are willing to lose if the stop is hit. Then work backward into lot size or quantity based on that risk amount. This prevents one trade from creating a chain reaction against your daily or total loss limits.

Traders who size consistently usually make better decisions because they are not negotiating risk in the middle of a live setup.