Back to learning quant basics to improve my position sizing.

If you want to find your optimal position size, try using the Kelly Criterion.

You only need to know:
- Win rate: p
- Loss rate: q = 1 − p
- Reward to risk ratio: b

For my setup:
- p = 0.4
- q = 0.6
- b = 2

Kelly formula:
f* (optimal size) = (bp − q) / b
= (0.8 − 0.6) / 2
= 0.10

This means the optimal size is 10% of capital per trade.

In practice, I will start with half Kelly (5%) to account for estimation errors.

Try running this calculation on your own strategy.

Some of you may find that your optimal size is zero or even negative. If that happens, it means you do not have a real edge yet. The solution is not better sizing. It is improving your trading skill first.

Good luck.