Position Sizing
How Turtle-style position sizing connects account equity, volatility, Unit size and risk limits.
Position sizing determines how much is traded when a signal appears. In a Turtle-style system, it is not chosen by confidence. It is calculated from risk and volatility.
Inputs
Typical inputs include:
- account equity;
- risk allowed per Unit;
- N or ATR value;
- contract multiplier or instrument unit;
- stop distance;
- maximum risk by market and portfolio.
Why volatility matters
A fixed nominal position can carry very different risk in different markets. Volatility-based sizing reduces the chance that a fast-moving market dominates the account simply because its price swings are larger.
Practical warning
Position sizing formulas are only approximations if execution is poor. Slippage, gaps, funding costs, minimum order sizes and liquidity constraints can all change real risk.