Struggling with position sizing and the 'cost of waiting'

asked by u/ryan_j · 4d · 4 answers

Hey everyone, been lurking for a bit and decided to finally jump in. I've been paper trading for about six months and starting to feel more comfortable with my strategy (mostly scalping $EURUSD and $GBPUSD on the 5-min chart, with some core swing ideas on indices). The biggest mental block I'm hitting now that I'm considering live trading is around position sizing, specifically when a setup takes a while to confirm or price action just chops around my entry for hours.

My backtesting shows good results when I enter at my pre-defined levels and the move happens relatively quickly. But in real-time, there are so many instances where I'm sitting in a trade, maybe slightly profitable or slightly down, waiting for confirmation, and that capital could be deployed elsewhere. I know the standard advice is to stick to the plan, but how do you experienced traders balance the 'opportunity cost' of capital tied up in a slow-grinding trade versus the risk of exiting too early and missing the eventual move? Is it just a matter of tightening stops or accepting that not every trade is a quick hit?

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Top answers

  • u/arjunrao· 9 pts· 4d

    The "cost of waiting" often turns into the "cost of overtrading" if you rush a position. Better to miss a setup than force one and lose capital.

  • u/sara69· 2 pts· 4d

    It's a common hurdle, especially moving from paper to live. Have you considered setting a fixed percentage of your account per trade, regardless of the setup, or are you looking for a more dynamic approach to sizing based on the probability of the trade?

  • u/min_wu· 0 pts· 4d

    It's interesting that you're focused on the 'cost of waiting.' I always thought the bigger issue was overtrading. Do you mean missing out on potential gains, or is there more to it for you?

  • u/teerapat.nakarin· 0 pts· 4d

    สำหรับคนเล่นสั้นอย่างเรา "cost of waiting" นี่มันบีบหัวใจจริงๆ ค่ะ บางทีเห็นโอกาสแวบๆ แล้วกลัวตกรถ กดไปก่อน สุดท้ายพลาดก็มีบ่อยๆ เลยค่ะ ลองใช้แนวคิด RR ratio เข้ามาช่วยในการตัดสินใจก็น่าจะพอช่วยได้บ้างนะคะ

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