Position Sizing – The process of determining how many lots or units to trade based on risk and account size. Effective position sizing helps manage risk and avoid over-leveraging. As Britannica explains, it involves calculating the appropriate trade size given entry price, stop-loss distance, account capital, and desired risk percentage. For example, a robot might compute position size so that a 50-pip stop loss on a EUR/USD trade risks only 1% of equity. In code, this is often implemented via a function or class that uses current balance, risk percentage, and stop distance to return a volume (in lots). Proper position sizing ensures that each trade’s potential loss fits the strategy’s risk profile.

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