How big of a position should someone enter with? In the past, our partners have had a debate. One who uses Candle Stick charts said start small and reverse scale in then out. Another, Erik Kolodny likes to come up with an amount that is at the threshold of comfort, he enters into the position with just a little more.
This is a provocative thought. Under no circumstances one should go above the "pain" threshold. Reduce the size by the 2x(amount of slippage) and 2x(commission).
Even this is not the defining factor.
One should have answers to these questions first:
- the biggest loosing trade against you?
- number of consecutive loosing trades?