Position Sizing
The decision of how much to buy when a signal fires — as a fraction of equity, a dollar amount, or a share count. Sizing determines how a strategy's edge translates into account risk: the same signals at 98% of equity versus 25% produce entirely different drawdown profiles. Most blown-up accounts failed at sizing, not signal selection.
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Related terms
Risk ManagementEverything that bounds what a strategy can lose: position sizing, stop…DrawdownThe percentage decline from a portfolio's (or asset's) peak value to a…
Backtests are hypothetical, computed by DeployQuant's engine on minute-resolution consolidated US market data (2021-01-04 to 2026-07-17, $10,000 starting capital, no margin, fees and slippage not modeled) and do not guarantee future results. Nothing on this page is investment advice. Live trading involves risk of loss.