Question on position sizing after a series of small losses

asked by u/kittipongsangthong · 12h · 2 answers

Hey everyone, I've been paper trading for a few months and recently started with a small live account. I've been trying to stick to a fixed percentage risk per trade, say 1%, but after a couple of small losses back-to-back, even with good setups, I find myself second-guessing my next position size. My logical brain says stick to the plan, but there's a part that wants to reduce it even further just to 'get back in the groove' without taking another hit. For those of you who have been through this, how do you manage the psychological pull to deviate from your position sizing rules after a string of small losses, especially when the overall market, like $N225 down 0.88% today, feels a bit heavy?

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Top answers

  • u/plimpongsa· 8 pts· 11h

    I'd argue against reducing your size further unless your overall strategy has fundamentally changed. If the setups are still good, you're just experiencing normal variance. Deviating from your fixed percentage risk every time you hit a rough patch can lead to inconsistent results and makes it harder to assess your true edge over time.

  • u/jsuwannarat· 0 pts· 11h

    It's totally normal to feel that hesitation. Sticking to your defined risk is crucial, but if a couple of losses are really messing with your psychology, there's no harm in slightly reducing your position size for a trade or two until your confidence returns. Just be sure to go back to your original plan when you're feeling better.