# Portfolio sizing and daily limits

> Trade frequency, daily loss rules, core vs risk-shot size, stop loss vs portfolio risk, and worst-case day scenarios.

Source: https://tradeecho.com/docs/risk-management/portfolio-sizing-daily-limits (updated 2026-03-22)

**Live session companion:** portfolio management, sizing, and risk - trade frequency, daily risk limits, position sizing, and risk per trade.

## Why this matters

- Blow-ups come from bad sizing, not bad ideas.
- Position size ≠ risk. **Your stop defines real risk.**
- Cap frequency to protect daily P/L (and your head).

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## $10k account - quick playbook

- **Max 4-5 trades/day.** Stop after 2 big losses; reset for tomorrow.
- **Core size:** $750-$1,000 per trade (about 7.5-10% of portfolio).
- **Risk shots:** $250-$500 per trade (about 2.5-5%) for higher-risk ideas.
- **Target 2-3R** on winners (+50-75% typical take-profit range for many option-style plays - adjust to your product).

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## Make it yours - check your rules

- [ ] I will take no more than 4-5 trades per day.
- [ ] If I take two big losses, I am done for the day.
- [ ] My core position size is $_____ (_____%).
- [ ] My risk-shot size is $_____ (_____%).
- [ ] My typical stop range is _____-_____%.
- [ ] My target per trade is _____ R (_____%).
- [ ] Optional: My daily loss cap is _____% of portfolio.

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## Risk per trade - $1k size examples

If your **position** is about $1,000, the table below shows **portfolio** risk for different **stop loss % on the position** (not on the whole account).

| Stop loss (%) | Risk as % of portfolio | Dollars at risk (on $1k size) |
|---------------|-------------------------|-------------------------------|
| 5 | 0.50% | $50 |
| 10 | 1.00% | $100 |
| 15 | 1.50% | $150 |
| 25 | 2.50% | $250 |

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## Daily risk if every trade hits stop

| Scenario | Per-trade risk (% of port.) | Trades | Worst-case day loss |
|----------|-------------------------------|--------|----------------------|
| Tight stops | 1.0% | 4 | ≈ 4% |
| Tight stops | 1.0% | 5 | ≈ 5% |
| Loose stops | 2.5% | 4 | ≈ 10% |
| Loose stops | 2.5% | 5 | ≈ 12.5% |

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## Execution rules (simple + enforceable)

- Enter **near your stop** - tight invalidation keeps losses small.
- **Cut fast** when thesis breaks; do not average down.
- **Scale out** into strength; let winners work up to 2-3R.
- **No revenge trades** - you do not get back losses by sizing up.

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Next: [Emotional trading and guardrails](https://tradeecho.com/docs/risk-management/emotional-trading-guardrails).