# Position Sizing

*Trading & Technical Analysis — Finicade finance glossary*

Position sizing decides how much capital goes into a trade, and it matters more than entry selection. Risking 1–2% of capital per trade means a losing streak is survivable; risking 20% means two bad weeks ends the account. The Kelly criterion gives a mathematically optimal size given edge and odds, and practitioners generally trade a fraction of it because Kelly's own volatility is brutal.

**Also known as:** bet sizing, risk per trade, Kelly criterion

**Related terms:** [Risk-Reward Ratio](https://finicade.com/glossary/risk-reward-ratio), [Expectancy](https://finicade.com/glossary/expectancy), [Drawdown](https://finicade.com/glossary/drawdown), [Trading Journal](https://finicade.com/glossary/trading-journal), [Risk Budgeting](https://finicade.com/glossary/risk-budgeting)

Source: https://finicade.com/glossary/position-sizing