The three-part gate
Name the exact price or observable condition that proves the idea wrong.
Translate a chosen loss budget into units before considering upside.
Write the skip, exit, and review rules while no position is open.
Risk-budget calculator
For simple linear instruments only. Values are hypothetical and stay on this device. Currency is intentionally unspecified so the arithmetic can be practiced in any single currency.
The math, made inspectable
loss budget = equity × (risk % ÷ 100)
risk per unit = |entry − invalidation| + estimated costs
whole units = floor(loss budget ÷ risk per unit)
Illustrative example: equity 10,000; selected risk 0.5%; entry 50.00; invalidation 49.25; estimated costs 0.05 per unit. The loss budget is 50, per-unit risk is 0.80, and the maximum whole-unit size is 62. Estimated risk at that size is 49.60.
A five-line pre-commitment
- Thesis: one observable cause-and-effect statement.
- Invalidation: one price or condition—not a feeling.
- Size: calculated from downside, not desired profit.
- Skip: conditions that cancel the idea before entry.
- Review: capture execution and reasoning after the outcome.
Options, futures, leveraged products, FX, and instruments with non-linear payouts or contract multipliers need instrument-specific math. Do not use this simple unit formula for them.
Continue with Vision Academy
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