Position Sizing: The Most Ignored Trading Skill
You know what separates winning traders from losing ones? It's not some secret indicator or fancy strategy. It's position sizing, and almost everyone ignores it.
Think about it. You spend hours analyzing charts, finding the perfect entry, and planning your exit. But then you risk way too much on a single trade because you're "confident." One bad trade later, and your account is down 30%.
Here's the truth:
Your win rate doesn't matter if one loss wipes you out
Professional traders risk 1-2% per trade, not 10-20%
Position sizing is what lets you survive the inevitable losing streaks.
Most traders obsess over being right. Smart traders obsess over how much they risk when they're wrong. You could have a 40% win rate and still be profitable with proper position sizing. You could have a 70% win rate and blow up your account without it.
The simple rule: Never risk more than 1-2% of your account on any single trade. Boring? Yes. Effective? Absolutely.
Stop trying to hit home runs. Start managing your risk like a professional. Your future self will thank you.
