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Optimal position sizing with conflicting signals?
I'm still trying to get a handle on consistent position sizing, especially when the trade thesis has varying conviction levels. Say I like a setup on $MSFT for a move up, but a broader market indicator I respect is flashing a minor cautionary signal. Do you reduce your standard risk unit, or do you wait for clearer alignment? How do others manage that sort of internal conflict?
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Ah, the classic 'My brain says buy, but my gut says run' dilemma. I usually end up doing something vaguely in the middle, then regretting it no matter what happens. Perhaps the trick is to just pick one and stick to it, for the sake of mental clarity if nothing else.