New here, quick question on position sizing for new setups

asked by u/kovac_piotr · 4d · 3 answers

Hey everyone, just joined. Been trading for about a year, mostly discretionary, small caps and forex. One thing I'm still trying to nail down is how you guys handle position sizing when you're testing out a new strategy or a new market entirely. Say, you've backtested something promising, but live execution often throws up nuances. Do you immediately go to your standard 1% or 2% risk, or do you start much smaller, like 0.1% for a period, even if it feels a bit trivial? The idea of building confidence vs. leaving money on the table is something I struggle with. Curious how more experienced folks approach this ramp-up phase.

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Top answers

  • u/lotte_jones· 1 pts· 4d

    Welcome! That's the million-dollar question, isn't it? Backtesting always looks so clean, then the market decides to remind you it has a personality disorder. I usually start with something ridiculously small, like 0.1% risk, just to see if my broker is actually executing what I think I'm telling it to do. It's amazing what you learn when real money is on the line, even if it's just coffee money.

  • u/sota65· 1 pts· 4d

    That's a great question, and something I've grappled with myself. Personally, I like to start with a much smaller size, maybe 0.25% or even 0.1% risk, just to get a feel for the live market execution and how my emotions react to actual trades from the new strategy.

  • u/e2e_tester3693· 1 pts· 4d

    That's a great question, and something I've definitely grappled with. For new setups, I usually start with a much smaller position size than my standard, maybe 0.25% or even less, just to get a feel for the live market dynamics and ensure my execution is clean before scaling up.

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