Position Sizing Basics for Retail Investors

Most retail drawdowns come from size, not from being wrong about the story.

Risk a fixed fraction

A common approach: risk a small percent of equity (often 0.5–2%) on a single idea, defined by entry to stop or invalidation level — not by how exciting the ticker feels.

Cap single-name exposure

Even high-conviction ideas can disappoint. Hard caps (e.g. no name above X% of portfolio) prevent one thesis from owning your year.

Correlation is sneaky

Five “different” tech names can be one bet. Sector and factor overlap matter more than ticker count.

AI confidence ≠ size

A model saying “85% confidence” is not permission to size up. Confidence reflects pattern-fit in the prompt’s data, not your bankroll.

Almorex’s risk-oriented agents can frame constraints; you still set the limits. See product overview.