Position size is the quantity of an instrument — shares, lots, or contracts — that keeps a trade's potential loss at a chosen percentage of account equity, given the distance to the stop-loss. It's calculated after the stop-loss is set, not before: the same dollar risk requires a smaller position with a wide stop and a larger position with a tight one.
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TRADING GLOSSARY
Position Size
The exact number of shares, contracts, or lots to trade based on account risk and stop distance.