How many units to buy or sell. Calculated as dollar risk ÷ risk per unit, so a stop-out costs about the planned amount.
How traders use it: Calculated after the stop is placed from structure.
Common mistake: Picking a size first and placing the stop to fit it.
Related: Risk per unit · Invalidation · R-multiple (R)
See this term in the full glossary · All terms
Concepts only. Education only, not financial advice. No pattern on this site has a published win rate.