You cannot control where the market goes. You cannot control when your stop is hit. The only variable you control in trading is how much you risk on each trade. This lesson covers how to calculate position size correctly.
In trading, outcomes are probabilistic. You cannot control whether a trade wins or loses. What you can control is how much capital you put at risk on each trade — and this single variable, applied consistently over hundreds of trades, determines whether a profitable strategy makes money or not.
The standard professional approach is to risk a fixed percentage of account capital per trade. The most common range for professional discretionary traders is 0.5% to 2% per trade. At 1% risk, a 10-trade losing streak loses 10% of account — recoverable. At 5% risk, the same losing streak loses 40% — potentially career-ending. The percentage is not arbitrary. It is determined by your strategy's expected win rate and the typical number of consecutive losers your strategy produces.
Position size = (Account × Risk%) ÷ (Stop Loss in pips × Pip Value). For a $10,000 account risking 1% with a 20-pip stop on EURUSD: ($10,000 × 0.01) ÷ (20 × $10) = $100 ÷ $200 = 0.5 lots. This calculation adjusts your position size so that if the stop is hit, you lose exactly 1% of your account — regardless of how far away the stop is.
Professional traders define the stop location first (where would the trade be proven wrong?) and then calculate the position size from that stop. Amateur traders often set a position size first and then fit the stop to suit. This is backwards — it means the stop is not placed at a technically meaningful level, which is why retail stops are so frequently hit.
These lessons cover concepts at a high level. If you want to understand how these tools are interpreted and applied in live market conditions — with the precision and confluence that produces actionable, high-quality setups — that is what the Marley mentorship programme is built around.
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