Position size

Turns the cash you are willing to lose into the number of units to trade. Use it before every entry, so size follows your risk rule.

Position sizing is the one piece of trading maths that decides whether a losing streak is an inconvenience or the end of the account. The idea is simple. Decide the cash you are prepared to lose if the trade goes wrong, measure how far the price has to travel from your entry to your stop, and divide the first number by the second. The answer is how many units you can hold so that being stopped out costs exactly what you decided and no more.

Risk on this trade is the cash figure the whole calculation hangs on. It comes from the risk per trade control in the inputs band, either as a percentage of your capital or as a flat amount. If the Staircase has a daily loss allowance set, this figure is capped by it, because a single trade risking more than a whole day is allowed to lose contradicts a decision you already made.

Stop distance is the price gap per unit. A wider stop is not automatically worse. It simply means each unit carries more risk, so the size comes down to compensate. This is why moving your stop further away to avoid being shaken out does not increase your risk if you resize. It is only dangerous when you widen the stop and keep the same size.

Notional exposure and exposure vs capital tell you how big the position is in absolute terms, which is a different question from how much you can lose. A tight stop can produce a small risk on a very large position. That is fine on a liquid instrument and dangerous on one that gaps, because a gap jumps straight past your stop and the loss is set by the size, not by the stop. Watch the exposure figure whenever you trade something thin, illiquid, or something that holds a position through a news release or overnight.