How do you get over the fear of increasing position size?

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CswiM;
That sounds like a paraphrase of PTJ, one of the most funny, most true i ever read .He told lack Schwager, the most common misconception people have is about Wall Street is= they ''know some thing'' -----Paul Tudor Jones LOL-LOL As far a high probability trades/investments ; older Turtles made most of those millions on low probability trades/BIG Trends,+ big leverage.

Since they {turtles} made so many millions that way [BIG leverage+ big TRENDS];
like to study cash markets[ zero leverage]+ BIG TRENDS

 

Yes.

In real life, traders and gamblers have to have an edge and do volume; lots and lots of trades and bets.

If you daytrade and earn a penny a share profit, how much volume must you do? How about earning two pennies a share?

Just how big an edge do people think can have manually daytrading, if they have one at all?
Of course the algos are doing volume.

In theory, and once in a very blue moon practice, 90 percent winning big edge bets can occur. However, I do not know of successful day traders or gamblers who only wait and wait and punch big.

I do know of a few successful investors and speculators like Buffett and Soros who are patient, skilled and sometimes wait and wait.
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Story:

I knew a huge Nasdaq scalper who made millions.

One day he received a call shortly after 9/11 that a plane had gone down near.. I forget.. big Eastern city. This information was not on his news feed.

Well.. he instantly shorted the SPY for the largest size he had ever traded and nervously waited for 15 minutes until the news hit. He won big.

But this was his only ever "special" big trade. Everything else was edge plus volume, volume, volume.

 

WARNING: The fellow in my story who made millions scalping years ago no longer scalps because his edge went away.

Things change. Sometimes the only winning move is not to play.

Or as Charlie Munger says:

"Tell me where I am going to die so I will not go there."

 

Yeah, the W.O.P.R. needs to tell that to Trump and Kim Jong-un.

 

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WEll, 777, like the top man at CME or one of those top Chicago exchanges said ''innovation deserves more than 15 minutes'' WARNING ;trading is not gambling@ all; done both. We used to gamble/ jerk .25 [quarters] out of of pool halls, as kids,; the fact that some commercial traders use .25 levels also has nothing to do with pool halls.Thanks

 

With practice working on demo account and studying market briefly.

 

IMHO, if not sure or cannot pull the trigger, use Kelly criterion as a guide.

For example your win probability is 90% (your prior posts) and your win payoff is 1:1 (your short option spreads are worthless at expiry), assuming your loss payoff is also 1:1, i.e., you manage your losing trade carefully. Then your Kelly is .28. So your bet size of $3 K is ~2/10 Kelly. Actually not too conservative considering you may not be able to manage your loser to 1:1.

If you are confident of your win & loss rate, then go to 1/2 Kelly or $7 K, which I won't recommend as you are relatively new to options, like me.

Good luck.

 

I don't trade options. I think you must have read someone else's post. And I don't know how you got the idea that my win payoff is 1:1

 

My apology. Still you should try Kelly. It will force you to figure out your win expectancy.

 

Lol, if you have 90% chance of winning 1 and 10% chance of losing 1, the optimal fraction to bet aka Kelly is 80%, not 28%.