## Core principle
Decide how much to lose before deciding position size. A common beginner mistake is opening first and choosing a stop later.
## Simple steps
Multiply account equity by risk percentage to get allowed loss. Then calculate size using stop distance and pip value.
## Example
USD 1000 account, 1% risk per trade, maximum loss USD 10. If stop distance is 50 pips, pip value must not exceed USD 0.2.
## Keep records
For every trade, record entry reason, stop distance, planned loss, actual loss, stop movement and rule violations.
