Position sizing breaks down right after you take a win or a loss.
Lose a trade? You want revenge. You size up to get it back fast.
Win a trade? You feel invincible. You size up because you're "on a roll."
Neither reaction has anything to do with the actual setup in front of you.
The edge doesn't change because you just won or lost. Your emotions did.
Good position sizing is boring. It's the same calculation every time, based on the setup's risk/reward and your total capital — not on how you feel about the last trade.
If you're sizing differently after a win or loss, you're trading your emotions, not the chart.
Lose a trade? You want revenge. You size up to get it back fast.
Win a trade? You feel invincible. You size up because you're "on a roll."
Neither reaction has anything to do with the actual setup in front of you.
The edge doesn't change because you just won or lost. Your emotions did.
Good position sizing is boring. It's the same calculation every time, based on the setup's risk/reward and your total capital — not on how you feel about the last trade.
If you're sizing differently after a win or loss, you're trading your emotions, not the chart.