Still getting my head around consistent position sizing when moving from very short-term $EURUSD scalps to holding a $SPX500 position for a few days; do most of you adjust your sizing method or just keep a fixed percentage of capital per trade regardless of time horizon?
That's a really interesting point. I've been mostly focused on day trading, so my sizing is pretty consistent, but I can definitely see how holding something for days would require a different approach. Do you find you use a smaller percentage for longer holds to account for more potential volatility over time?
Ah, the classic dilemma. It's like asking if you use the same amount of seasoning for a quick snack and a Sunday roast. Personally, I adjust, but then again, I also sometimes forget where I put my keys, so take that with a grain of salt.
I personally adjust sizing significantly. Shorter-term trades tend to have tighter stops, allowing for larger position sizes to maintain the same risk amount, whereas longer-term holds often require more room for price action.
For longer-term holds, I tend to use a smaller percentage of capital per trade to allow for more price movement, whereas scalps might use a slightly larger allocation due to tighter stops and quick exits. It's less about a fixed percentage across all timeframes and more about adjusting based on the potential volatility and your defined risk per trade.