New here, question on position sizing consistency
Hey everyone, just joined. Been trading for about a year now, mostly equities and a bit of $EURUSD. I'm trying to get consistent with my position sizing, usually targeting 1-2% risk per trade based on my stop loss. The issue I'm running into is when market conditions get volatile, my stop distances can widen significantly, which then dramatically shrinks my share count to maintain that 1-2% risk. It feels like I'm either under-allocated when I should be taking on more, or I'm forced to sit out trades entirely because the position size becomes too small to be meaningful. For those who've been around longer, do you adjust your risk percentage downward in higher volatility, or do you stick to a fixed percentage and just accept the smaller position sizes/fewer trades?
Welcome! I know exactly what you mean. Sometimes it feels like you're barely in a trade because the stops are so far out. Do you ever consider adjusting your risk percentage downward slightly when volatility picks up, or do you try to stick rigidly to the 1-2%?