Position sizing before prediction

Ask a struggling trader what they are working on and they will tell you about entries. Better confirmation. A cleaner setup. Some filter that keeps them out of the bad ones.

Almost nobody says "I am working on how much I risk."

That is the part that decides whether you survive long enough for an edge to show up. A strategy that wins 55% of the time is a good strategy. It will also hand you six losers in a row several times a year — not as a worst case, but as ordinary arithmetic. If your size assumes that cannot happen, the strategy never gets the chance to be right.

Fix the risk first, then look for the trade.

Decide what a single loss costs you before you open a chart. One percent of the account is a reasonable place to start, and it is boring on purpose. From there, the stop distance sets the lot size — not the other way round. If the level you actually want to trade sits far away, the position gets smaller. If it sits close, the position gets bigger. The amount you lose when you are wrong stays the same either way.

The moment you find yourself widening a stop to justify a size, the trade has already stopped being about the market.

The number that matters is not your win rate.

It is how much of the account is still there after a bad month. A trader risking 1% and losing eight in a row is down about 8% and completely operational. A trader risking 5% is down a third and will start making decisions out of fear — bigger size to catch up, earlier exits on the winners, the whole spiral.

Same strategy. Same trades. Entirely different outcome, decided before either of them clicked anything.