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Trading Mindset – Position Size
One of the most important decisions crossroad points we face as a trader. Is when to increase or reduce the size of positions that we take. When is the right time – to step up and get properly involved, or rein things back a little.
The key thing in this, like any other aspect of trading. Is that it must be based on process, not a gut feel. So what sort of process can you use to provide some structure to this critical decision?
Step one – Keep an Equity Curve
Keeping an equity curve – a statistical record of your trading history. Is one of the most important aspects of a successful trading business. And one which so few traders maintain. The notion that it’s all on your trading platform is fine. Until you switch the platform or perhaps want to manipulate the data to show you more information.
Step two – Track your performance
Once this is in place, tracking your performance – the good and the bad will provide a level of clarity and objectivity. To give you an example, one of the key things not to do is to actually stop trading. If you are having a tough run, through the process, scaling your position down to a manageable size even if very small, will keep you in the game – and that is critical. Should you stop all together, resuming – getting the momentum to actually restart becomes tough and a process that is worth avoiding.
The same is true when you are having that strong run and really dialled in to your trading – how and when do you know to add bigger positions, and in a structured way?
So how do you do this?
Building a simple and easy to use process will help immeasurably and to help you with this, have a look at the training video at the start of this article giving you a concrete process to use that will help you right off the bat.
Mindset Mastery Course
NOTE: This video is just a sneak peak into our Mindset Mastery Program. What does your trading plan look like? What does the equity line of your trades look like? Is your trading strategy adequately represented in your account? If you’re ready to take the steps to developing a solid trading plan or at least are curious about how others have done it, you can access the full Mindset Mastery Program by clicking here
