# Position sizing: start from the worst fall

> Learn to size a position from a loss limit and a fund's worst fall, using real max drawdowns for QQQ, TQQQ, SOXX and SOXL from ETFIQ scorecards.

Data as of Nov 10, 2026. Rebuilt every trading night.

## Position sizing: start from the worst fall

Data as of Nov 10, 2026. Rebuilt every trading night.

As of Nov 9, 2026 , TQQQ's deepest fall on weekly closes since February 2010 was 80.4% , against 35.1% for QQQ.

Risk and Execution · Lesson 3 of 4 1 2 3 4

Slide the amount to see what each fund's worst fall would cost in dollars. Position (hypothetical) $10,000 On $10,000: QQQ worst fall $3,506, TQQQ worst fall $8,036, SOXX worst fall $4,444, SOXL worst fall $8,985. Hypothetical positions. Step 1: the limit (hypothetical). A $50,000 account with a 10% loss limit on any one position: $50,000 × 0.10 = $5,000 . Step 2: divide. QQQ: $5,000 ÷ 0.351 = $14,245 TQQQ: $5,000 ÷ 0.804 = $6,219 SOXX: $5,000 ÷ 0.444 = $11,261 SOXL: $5,000 ÷ 0.898 = $5,568 Step 3: the climb back. A fall of D needs a gain of 1 ÷ (1 − D) − 1 to recover: QQQ: 1 ÷ 0.649 − 1 = +54% TQQQ: 1 ÷ 0.196 − 1 = +410% SOXL: 1 ÷ 0.102 − 1 = +880% Step 4: what the floor misses. A 3x daily fund loses about 3 times its index's one-day move. A one-day index fall of 33.3% would take a 3x fund to about zero (3 × 33.3% ≈ 100%), whatever its history shows.

### The question

How much of my account can I put into one fund without one bad stretch wrecking it?

### The idea

- Most people pick an amount first. A sounder process runs the other way: - Set a loss limit. This is the most you accept losing on one position, in dollars. It is often a share of the account.

- Find the fund's worst fall. This is its max drawdown , the biggest drop from a high to a later low, which the Beginner course calls the worst fall.

- Divide. Position size = loss limit ÷ worst fall.

- Then remember: the worst fall so far is a floor, not a ceiling. The future can be worse. ETFIQ's scorecard measures on weekly closes, so a deeper daily low can sit inside a week.

### Worked example

The 4 steps beside the drawing at the top work this through on ETFIQ data. Point at a step to light the part of the drawing it describes.

From the scorecards on two fund pages, as of Nov 10, 2026 . TQQQ and QQQ cover February 2010 to November 2026 ( 872 weekly returns). SOXL and SOXX cover March 2010 to November 2026 ( 868 ).

| Fund | Worst fall |
| --- | --- |
| QQQ | −35.1% |
| TQQQ (3x QQQ) | −80.4% |
| SOXX | −44.4% |
| SOXL (3x SOXX) | −89.8% |

Each loses about $5,000 if its worst fall repeated. The 3x funds get under half the dollars. Their worst falls were 2.0 to 2.3 times their index's, not 3 times, because losses compound on a shrinking base and nothing falls more than 100%.

A −80% fund needs to multiply about five times to get back.

This is why a leveraged fund's worst fall so far is the weakest guide of all. See lesson 1 on how swings compound.

### The common mistake

"The worst fall so far is the most I can lose." It is only the worst so far, on weekly closes. SOXX's worst fall was −44.4% and SOXL's −89.8% . A deeper index fall would take SOXL deeper still. Size from history, then leave room for worse.

### Check your understanding

Pick an answer to see why. Two of three right passes the lesson.

1. You set a $3,000 loss limit. A fund's worst fall was 60%. What size does the rule give? A $1,800 B $3,000 C $5,000 D $7,500 Answer: C. $5,000. $3,000 ÷ 0.60 = $5,000. Not A: $1,800 multiplies the limit by the fall instead of dividing. 2. A fund fell 75% from its high. What gain does it need to get back? A +75% B +150% C +300% D +400% Answer: C. +300%. 1 ÷ 0.25 − 1 = 3, or +300%. Not A: the gain is measured on a much smaller base than the fall was. 3. Why is a leveraged fund's worst fall so far a weak guide to its future worst? A One large daily fall in the index, times the multiple, can exceed anything in its history B Leveraged funds can't fall further C Weekly data always overstates falls D Max drawdown includes the fee Answer: A. One large daily fall in the index, times the multiple, can exceed anything in its history. a 3x fund takes about 3 times any single day's fall, so one rare day can set a new low. Not C: weekly closes can miss a deeper daily low, so they understate falls, not overstate them.

### Takeaways

- Set the loss limit first, then size: limit ÷ worst fall.

- Treat the worst fall so far as a floor and leave room for worse, most of all in leveraged funds.

- Check the climb back: a −80% fall needs +400% or more to recover.

### Do it on ETFIQ

Read your fund's worst fall on its scorecard Your fund

### Where to next

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Source: ETFIQ, independent ETF data. Recomputed nightly from public filings and prices.
Cite: ETFIQ, Position sizing: start from the worst fall, data as of Nov 10, 2026. https://etfiq.com/academy/risk-and-execution/position-sizing-and-drawdown-limits/
Licence: https://etfiq.com/license/ Data ETFIQ computes is free to use with attribution: ETFIQ (etfiq.com). Issuer data stays under its owner's terms.
HTML: https://etfiq.com/academy/risk-and-execution/position-sizing-and-drawdown-limits/