Hello Millionaire, I agree, trying to go to 1 contract to XX (where XX is normally +10) just because it "feels good" or "I need to get back breakeven", is when I loss alot of money and had severe set back. When I adapted the simple risk management policy of "only risk 2% of your account balance per trade", this calmed and humbled me. Now I do not think about contract size going up or down. If my account increase, my contract size increase. If my account decrease, my contract size decrease. In addition, I do not think about "hmmm, but I do not want to use a big stop on that trade, even though its the right size stop to use" Earn the right to trade size.
2% is too slow, takes too long to up position size, I use 'Kelly methods' to boost up my position sizing
Hello Millionaire, Thanks for the feed back buddy. I appreciate any opinions/recommendations to hurry up my contract sizing in a logical way. Why do you say 2% takes too long? Also, where can I read about Kelly methods for increasing size?
If you don't have a well defined system, then Kelly might be hard to calculate for your trading. There are lots of articles on the web and a few youtube videos as well to introduce the concept. Google 'Kelly criterion', it is a concept that comes from gambling. But putting Kelly to one side. In general, you don't have to fix your bet size to say 2%, if you broker gives you access to enough leverage, you can sometimes bet 3,4,5% (or even more). But only when you have enough of a profit cushion, then you can up your bet percentage as well.
@Millionaire As it is said, opportunities in trading are like trains. When one leaves the station, it’s the time for another one to arrive. Instead of looking back and thinking what could have happened, it’s best to understand how you’ll handle a similar situation in the future so you can squeeze most out of that opportunity.