○ Multiply your account balance by the percentage of risk you're willing to take on the trade.

​○ This is portfolio risk. For example, if you're willing to risk 5%, that’s the number you’ll use.

2. Use the ATR for Position Sizing

○ Divide your risk amount by 2 × ATR value.

○ The ATR (Average True Range) can be found at the bottom of the chart.

○ ​For example, AMD’s ATR is around 4.86.

3. Calculate Number of Shares

○ The result from the above step gives you the number of shares to trade.

4. Convert Shares to Option Contracts (If Applicable)

○ If you’re trading options, divide the number of shares by 80 (based on trading at the 80 delta).

​○ This gives you the number of contracts to use.