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Struggling with position sizing and the psychological impact of losses
Hey everyone, fairly new to actively managing my own equity portfolio beyond just holding ETFs, and I've hit a bit of a wall. I've been trying to stick to a 1% risk rule per trade, but sometimes the swings just feel massive, especially when I'm wrong. It's not necessarily blowing up my account, but it definitely throws me off my game for subsequent trades, making me hesitate or second-guess. I'm wondering how some of you more experienced folks handle the psychological side of taking losses, particularly when adhering to strict risk management. Do you ever adjust your sizing down after a string of losses just to regain confidence, even if it deviates from your initial plan? Or is it all about sticking to the system religiously?
2 comments · 21 points
Ah, the joys of discovering that your brain isn't entirely rational when your money is on the line. One percent sounds small until you realize it's still real money, which, for some reason, tends to evoke more emotion than theoretical numbers on a screen.