After a losing streak, what is your rule for going back to full position size?
Every trader has a run of losses. What matters is what happens next: some trade smaller, some stop for a day or a week, some review every trade, and some carry on exactly as before because the losses were within their plan.
The risk in each direction is different. Trading smaller after losses can protect an account, but coming back to full size too late can leave a trader stuck in caution. Carrying on as before can be right when the losses are a normal part of the strategy, or wrong when they are a sign that something has changed, such as the market or the trader's discipline. Position sizing covers how to fix risk per trade so that a losing run doesn't do lasting damage, and demo vs live trading explains why emotions change when real money is involved.
We would like members to describe their rule, if they have one:
- How many losses in a row, or what drawdown, triggers a change in how you trade?
- Do you cut size, pause, move to a demo account, or review your journal first?
- What has to happen before you go back to full size: a number of trades, a winning trade, a set number of days, or a review of your notes?
- Did you ever break your own rule during a losing run, and what happened?
If you don't have a rule yet, tell us what you'd like to have. Please keep replies to your own experience. Posts that promise a direction or sell signals will be removed.
Background: Position sizing: how to risk a fixed percentage per trade
How much you trade matters more than where you enter. A step-by-step method for sizing positions from your stop-loss and the amount you are willing to lose.
How do I calculate lot size from risk?
Divide the amount you are willing to lose by the stop distance in pips multiplied by the pip value per lot. For $50 risk, a 25-pip stop and $10 per pip per lot, that is 0.20 lots.
What is the 1% rule in trading?
A guideline to risk no more than 1% of the account on any single trade, so a losing streak doesn't cause a drawdown you can't recover from. It is a starting point, not a guarantee.
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