Position Sizing and the 1% Rule

Position sizing decides how much money you put into a single trade. It is the single most important variable in your entire trading career — more important than your entry, your indicator, or your "gut feeling." The size of your bet matters more than the direction of your bet.

Most beginners do not blow up their accounts because their strategy is bad. They blow up because they bet too big. A trader with a mediocre strategy and great position sizing will outlast a genius with reckless sizing every single time.