Position Sizing Explained: How Much Should You Risk on a Trade?
How to size a trade from your risk limit: account risk, the position-sizing formula, stop distance, volatility, leverage, and total open risk.
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The latest articles and guides from The Financial Compass.
Risk Management in Trading: How to Protect Your Capital
How traders control downside risk: risk per trade, position sizing, stop orders, leverage, daily loss limits, and total portfolio exposure.
What Is Inflation and How Does It Affect Your Money?
Inflation is a broad rise in prices that erodes what your money can buy. How it is measured, and how it affects your savings, debt, investing, and retirement.
Your Savings Rate and Financial Independence: Why the Percentage Matters
Your savings rate is the share of your income you save and invest. Here is why that percentage shapes how fast, and how big, your path to financial independence is.
How a 401(k) Works: Contributions, Employer Match, Taxes and Withdrawals
A 401(k) lets you save for retirement through work. How contributions, the employer match, vesting, taxes, rollovers, and withdrawals actually work.
Dollar-Cost Averaging Explained: How Regular Investing Works
Dollar-cost averaging means investing a fixed amount on a regular schedule, whatever the market is doing. Here is how it works, where it helps, and its limits.
What Is an Index Fund and How Does It Work?
An index fund tracks a market index, giving you exposure to many securities in a single holding. Here is how index funds work, what they cost, and how to choose one.
Asset Allocation Explained: How Stocks, Bonds and Cash Fit Together
Asset allocation is how you divide your money across stocks, bonds, and cash. Here is how to choose a mix that fits your goals, timeframe, and tolerance for risk.
Stocks vs ETFs vs Mutual Funds: Understanding the Differences
Buying a stock gives you ownership in one company. An ETF or mutual fund gives you a share of a portfolio. Here is how the three differ in diversification, trading, fees, and taxes.
The 50/30/20 Budget Rule: How It Works and When It May Not Fit
The 50/30/20 rule splits take-home pay into needs, wants, and savings. Learn how the framework works, what counts in each bucket, and when the ratios may not fit your life.