Question on position sizing for ranging pairs - particularly EUR/USD
Hey everyone, been lurking here for a bit and finally decided to ask something that's been bugging me. I've been trying to get my head around position sizing properly, especially with the current chop on something like $EURUSD. I'm finding that if I size for my usual 'swing trade' type stop-loss (say, 50-70 pips), it feels too big for the tighter ranges we're seeing. But if I size down for a tighter stop, the R:R often gets skewed because the move itself might not be that big, or I get taken out on normal market noise.
How do you guys adjust your position sizing strategies when a pair shifts from a trending environment to a consolidative or ranging one? Do you just reduce overall risk percentage per trade, or do you have a different method for calculating size for range-bound moves? Any insights would be appreciated. Still trying to get a handle on how the pros manage this without constantly over-risking or under-risking.
It's a common challenge. For range-bound pairs, I often find it more effective to size based on a percentage of the range itself, rather than a fixed pip amount. This allows for adjustments without necessarily changing your overall risk per trade.