SIZE

I am kind of profitable, and I said something like that on here. It's just like Brandonf said, you have to increase size slowly to allow yourself to get used to it.

 

Sometimes the ability to cope with size is a psychological game. It is a derivitave of the culture, more specifically whichever stratum of the culture you were trained into percieving is your naturally awarded place. Of course, this info is delivered to you by your parents and to them by their parents in the never ending game of protecting and perpetuating who "we" are. Size becomes a tool that can be used for destruction if one percieves that it is moving one into a place where one may not deeply believe one belongs. Many fall apart when trading large positions because it redefines who they are, conflicting with deep inner beliefs they don't even know they posses, hence the fear that causes inappropiate decision making.

 

The Answer uses 10 inches Bubba!

 

If you've been screwing up a lot with small size, it helps to make it all back with one big trade, and you gotta have size to do it, so do it before you don't have enough money left to put it on.

If the big trade goes the wrong way, so what? You were gonna piss it all away a little at a time anyway.

And if the big trade works, you can sit back and say you were lucky and how you're never going to do that again and keep trading without learning anything.

That's why they say it doesn't take brains to trade.

 

Banjo:
Powerful, insightful, and right on the money! Truly a kick ass post!

 

Finally a direct tie to why MrMarket and his 385 bench-press is such a success.

:eek:

 

Larger size makes your trading more difficult because people start backing away from you..

 

May I ask a question on Size? If you increase size in line with an increasing fund (original funding plus net profits or by adding more funding) does the market limit increases in staking?

So pro rata risk stays the same .. does the market become less and less liquid because you go on increasing trading size?

In practice does this become a problem?

 

yes

 

Size forces you to be precise. In other words if you're a 10 lot bond scalper and the bid starts to trade out you may be "late" and still get those last 10 lots left or be filled on an odd lot trade if you're the offer. But if you've got 120 on and you only get 10 or 20 on the change then you've got to decide quick whether or not to jump the gun. You get a lot of great fills on small stuff that you can't replicate with size.