Fixed-fractional sizing

Risking a fixed fraction of the account (for example 1%) on every trade, where risk equals the entry-to-stop distance times position size. Dollar risk scales up as the account grows and down as it shrinks. Simple and robust; 1% is a common default, 2% is aggressive, and beyond that you are relying on luck about your losing streaks.

First used in Lesson 2.6 · Position sizing and risk: how much, and how not to blow up — the lesson that makes this term real.