When you're having a good run, how do you decide when to scale up your position size without letting the 'hot hand' fallacy get the better of you, especially after a period of smaller wins?
Ah, the classic 'I'm a genius' phase. I usually wait until I've successfully predicted a market move while simultaneously burning toast, which conveniently grounds me back to reality before I go full leverage.
It's always a tough balance. I usually tie scaling up to clear improvements in my win rate and risk-reward profile over a statistically significant sample of trades, rather than just a few good days. What specific metrics do you look at to confirm a good run isn't just luck?
I generally scale up based on predetermined criteria, not 'good runs.' If my system's edge dictates larger positions are warranted by current market conditions or improved metrics, I'll do it. Otherwise, a few wins don't change anything.