It took me going from an eight-figure account to nearly wiping it out to realize that the people who truly survive aren’t the ones who chase rallies, but the ones who split up their positions.
This trade didn’t make me a fortune in the end, but it helped me avoid the later drawdown that nearly wiped out my account.
From 2020 to 2022, my account grew to eight figures at one point. When the market was doing well, a lot of people thought going all in was the right move. I tried it too, and when the market turned, I gave back most of what I’d made. After that, I made myself stick to one approach: splitting up my position. I’d start with a small position to test the waters, add more once support was confirmed, then follow through after a breakout. If I was wrong, I’d admit it. If I was right, I’d add gradually.
At the time, I focused on just three things:
Was my first entry just a test, or had I already bet on a direction? When the price pulled back, had support really held, or was I just assuming that “a drop means it’s cheap”? Before the trend was confirmed, had I left myself enough room to handle a sudden drawdown?
When all the signals weren’t there, I’d rather make less than mistake a temporary bounce for an established trend. Looking back, I realized that losses often weren’t caused by getting the direction completely wrong, but by taking a position that left me needing to be right.
After reviewing my trades, I started prioritizing “surviving” over “being right.” A price rebound doesn’t mean the trend has recovered, especially when sentiment is overheated and many people are already fully invested. Splitting up a position isn’t about trying to seem cautious; it’s about leaving yourself room to adjust if you’re wrong.
When you review your trades, what do you tend to overlook most: position sizing or direction?
This trade didn’t make me a fortune in the end, but it helped me avoid the later drawdown that nearly wiped out my account.
From 2020 to 2022, my account grew to eight figures at one point. When the market was doing well, a lot of people thought going all in was the right move. I tried it too, and when the market turned, I gave back most of what I’d made. After that, I made myself stick to one approach: splitting up my position. I’d start with a small position to test the waters, add more once support was confirmed, then follow through after a breakout. If I was wrong, I’d admit it. If I was right, I’d add gradually.
At the time, I focused on just three things:
Was my first entry just a test, or had I already bet on a direction? When the price pulled back, had support really held, or was I just assuming that “a drop means it’s cheap”? Before the trend was confirmed, had I left myself enough room to handle a sudden drawdown?
When all the signals weren’t there, I’d rather make less than mistake a temporary bounce for an established trend. Looking back, I realized that losses often weren’t caused by getting the direction completely wrong, but by taking a position that left me needing to be right.
After reviewing my trades, I started prioritizing “surviving” over “being right.” A price rebound doesn’t mean the trend has recovered, especially when sentiment is overheated and many people are already fully invested. Splitting up a position isn’t about trying to seem cautious; it’s about leaving yourself room to adjust if you’re wrong.
When you review your trades, what do you tend to overlook most: position sizing or direction?
