Why position sizing deserves its own checklist
Many trade reviews fail because size decisions are remembered loosely. Writing sizing inputs before entry makes your performance review more useful and helps you compare strategy outcomes on equal risk terms.
Pre-trade sizing checklist
- Risk-per-trade limit set. Define maximum account risk for this trade in percent and currency.
- Stop or invalidation reference chosen. Use a clear exit level so risk per contract can be estimated.
- Contract count calculated. Size contracts from risk limit and per-contract risk, not intuition.
- Liquidity check completed. Confirm bid/ask spread and open interest support planned size.
- Scaling rule written. State when you may add, reduce, or hold size during the trade.
- Portfolio overlap reviewed. Check correlated positions to avoid hidden concentration.
Suggested journal fields
| Field | Purpose | Example |
|---|---|---|
| Risk per trade | Sets exposure ceiling | 0.75% of account |
| Risk per contract | Converts risk into size | $92 per contract |
| Contracts entered | Tracks execution size | 3 contracts |
| Scaling rule | Controls adds/reductions | Add only after first target holds |
| Correlation note | Prevents concentration | Avoid adding if sector exposure exceeds 20% |
Post-trade review prompts
- Did the final size match the original risk plan?
- Were any adds or reductions made outside the written scaling rule?
- Did position overlap increase portfolio drawdown more than expected?
Pair these prompts with the weekly trading review checklist so sizing mistakes are visible early.
Execution tip: If you cannot explain the contract count in one sentence before entry, reduce size and document why.
Related guides
Use this checklist with the risk plan checklist, trade entry checklist, and trade adjustment checklist for complete position-level documentation.
FAQ
Should position size be smaller for event trades?
Many traders reduce size for event-driven trades because gap risk can exceed normal assumptions.
Can I use different sizing rules by strategy?
Yes, but write the rule before entry and keep it consistent for that strategy family so reviews stay comparable.