You hold six open positions, each risking 1 percent, and all six are semiconductor stocks. What is your actual risk?

Closer to a single 6 percent bet, because highly correlated positions tend to fail together

Exactly 1 percent, because each stop is set at 1 percent

Less than 6 percent, because diversification across six tickers reduces risk

Unknowable without the beta of each stock

A strategy wins 80 percent of its trades and still loses money over a year. How?

The average loss is far larger than the average win, so a handful of losers wipes out many small wins

The broker charged commission on every trade

An 80 percent win rate is impossible, so the record must be wrong

The wins were taxed and the losses were not deductible

A strategy wins 55 percent of the time at even money odds. What does the full Kelly formula suggest betting, and what do practitioners do with it?

10 percent of the bankroll, which most people then cut to a quarter or a half of Kelly because the inputs are estimates

55 percent of the bankroll, matching the win rate

1 percent, the same as the standard trading rule

Price approaches your stop and you move it lower to give the trade room. What have you actually done?

Converted a planned, sized loss into an unplanned one, which breaks the arithmetic every other rule depends on

Reduced your risk, because the position now has more time to work

Improved your expectancy by raising your win rate

Nothing meaningful, as long as the position size is unchanged

Trading Strategies quiz intermediate

Risk Management and Position Sizing Quiz: 10 Questions

Test the arithmetic that decides whether a trading account survives a bad month.

10 questions · about 6 minutes · instant explanations · nothing you answer leaves your browser

AI-assisted, reviewed and edited by Ryza Glorioso. How we use AI

Sep 23, 2026 6 min read

About this quiz

Ten questions on the 1 percent rule, R multiples, expectancy, drawdown arithmetic and portfolio heat, with the numbers worked out in full. Each question comes with a short explanation of the right answer and a link to the guide that teaches it, so a wrong answer is a reading list rather than a dead end.

The quiz draws on the Trading Strategies section. If you are new to the topic, start with the guides below, then come back and test yourself. Scores are calculated in your browser and are not stored or sent anywhere.

Frequently asked questions

Is this quiz free?

Yes. No payment, no account and no email address are needed, and every answer is checked in your browser so nothing about your result is stored or shared.

What score counts as passing?

Eight out of ten. Position sizing is the part of trading where being roughly right is not good enough, because the arithmetic decides how many losing streaks your account can absorb.

Where can I learn the topics I missed?

Each explanation links to the guide that covers that idea, including the risk management guide with its expectancy worked example and the position sizing guide that goes beyond the flat 1 percent rule.

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Guides this quiz is based on

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