Playbooks

What it is

Risk sizing is arithmetic about a scenario, not a decision to take it. Given an entry idea and the price that invalidates it, it says how far that is in percent and in volatility, and how large a position would put a chosen share of a notional account at risk. It never tells the user to buy, sell or size a real trade.

What to look for

• Invalidation first. The price at which the scenario is wrong comes from the method used (a swing, a zone edge, a level), never from a round percentage.
• Distance. Entry to invalidation, in percent and in ATR (get_candles.structure has the ATR). Under about one ATR is likely noise; several ATR means a wide scenario.
• Volatility regime. analyze_asset gives annualized volatility and drawdown history. A stop distance that the asset's normal daily range covers often is fragile.
• Notional account. Use the user's own figures if they give them; otherwise a notional 10,000 USD and 1 % risk, stated as an illustration.
• Arithmetic. Risk amount = account × risk share. Units = risk amount / (entry − invalidation). Notional = units × entry. Say the notional as a share of the account, so leverage is visible.
• Correlation. Two scenarios in assets that move together (compare_assets correlation) are close to one risk, not two.

How to mark it

• position with the entry, the invalidation as the stop and one to three targets.
• level for the invalidation price, labelled Invalid, and zone kind range for the ATR band around the entry if the stop sits inside it.
• marker on the swing that defines the invalidation.

Scenario logic (analysis, not advice)

• State the reward-to-risk of each target. Under 2:1 is weak; say so.
• Give the arithmetic in one short table: entry, invalidation, distance (% and ATR), risk amount, units, notional and its share of the account.
• If the notional is larger than the account, the scenario needs leverage: say that plainly, without suggesting it.

Invalidation

The arithmetic is only as good as the invalidation. If price closes through the invalidation, the scenario is over; if volatility widens so that the distance is under one ATR, the numbers no longer describe it.

Pitfalls

Do not move the invalidation to make the numbers look better. Sizing describes a hypothetical; it is never a recommendation, and gaps or thin markets can fill well past any stop.