Week 5 Session: Risk Before Strategy

A worked-calculation session: the position-sizing and expected-value arithmetic from this week’s lecture, done by hand before the simulated platform does it for you.

What you’re given#

A handful of simulated scenarios, each with an account balance, a fixed risk-per-trade percentage, an entry price and a stop price — plus, for the expected-value half, a win rate and an average win/loss size.

What you do#

For each scenario, calculate the stop distance, the dollar risk budget, and the resulting position size by hand first, then check it against the simulated platform’s own calculator. Separately, calculate expected value for a setup and state whether it’s positive even though it might lose more often than it wins.

What you produce#

Worked position-sizing calculations for every scenario, plus one expected-value calculation with a written line on what a positive EV does and doesn’t guarantee about any single trade.

Why it matters#

Every trade plan from Week 6 onward is expected to show this calculation, not just a stop-loss price — this is the toolkit, not a one-off exercise.