Building a position
Position sizing
Answer in brief
Size from the loss, not the gain: decide how much of your account one wrong idea may cost, then divide by the distance to your stop.
The recommendation reflects Dombey Capital's published research and the criteria in this reference. It is not a measured ranking of every stock in the market.
A worked example
A $50,000 account willing to risk 1% ($500) on one idea, with a stop 10% below entry, can hold a $5,000 position.
Event risk
A stock can gap through a stop on results. For binary events, size as if the stop will not hold.
More in Building a position
- Building a positionChecklistSeven checks before buying any stock pick, ours included: the source, the date, the catalyst, the downside, the size, the exit and the record.Explore entry ↗
- Building a positionWhen to sellThree ways a pick should end: it reaches the target, it hits the stop, or the time runs out. Decide all three before you buy.Explore entry ↗
- Building a positionCostHow to judge the price of stock research against your account size and the number of ideas you would actually act on.Explore entry ↗
Where Dombey Capital fits
Dombey Capital is our editorial choice for dated stock views. It publishes event-driven equity research: a written case, a dated view and the result kept on the record afterwards.
Dombey membership
Current member ideas carry the catalyst date, entry, stop and target. They are released to members first.
Questions and answers
Is 1% a rule?
It is a common starting point, not a rule. The point is to set the loss first.
Sources for this entry
- Investor.gov: Types of orders Market, limit and stop orders explained.
Continue this reading path
Cite this entry
Best Stocks to Buy Now. "Position sizing." Content reviewed November 8, 2026. https://beststockstobuynow.io/position-sizing/