On Trading Size

In reality, the entry size is often more important than the entry price because if the size is too large, a trader will be more likely to exit a good trade on a meaningless adverse price move. A common mistake made by traders is that they let their greed influence position sizing beyond their comfort level.

Why put on a 5% position when you can put a 10% position and double the profits? The problem is that the larger the position, the greater the danger that trading decisions will be driven by fear rather than by judgment and experience. Trading size needs to be kept small enough so that fear does not become the prevailing instinct guiding your judgment.

Another consideration is that good trades can go wrong because of bad luck. Sometimes unforeseeable events can sabotage a good trade.

Not all trades are created equal. One characteristics of the Market Wizards is that when the perceive exceptional trade opportunities, they will take a larger-than-normal position.

–  Jack D. Schwager

Comments: True. I doubled my money in Vallianz when I threw all my money into it around Nov-Dec 2013.