Risk-based sizing answers "how much will I lose if the stop hits?" directly. You declare the percent of capital you're willing to risk per trade, and the engine sizes the position so the stop distance equals that risk.
Formula
size_in_units = (capital × risk_per_trade_pct / 100) / stop_distancestop_distance is the price difference between entry and stop, in
the asset's price units.
Shape
"position_sizing": {
"method": "risk_based",
"risk_per_trade_pct": 2.5
}Params
- risk per trade percent - percent of capital risked per trade. Default 2.5.
- max position percent - optional cap on position size as a percent of capital.
Why this is the default
- Consistent risk per trade. A 50-pip stop and a 5-pip stop produce different position sizes, same dollar risk.
- Scales with capital. As account grows, position size grows proportionally.
- Pairs naturally with ATR stops - wider volatility = smaller position, automatically.
Pitfalls
- Stop distance must be known. If the stop type returns zero distance, the size calculation blows up. The engine clamps to a safe minimum and logs a warning.
- risk per trade percent too high = single bad trade dents the account. 2.5% is aggressive; 0.5-1% is typical for serious systematic accounts.