Importance of Position Sizing

The size of each position that a trader takes largely determines whether or not they will be successful. This is true for every trader, both new and experienced.

Too Large of Size

This is a common problem for a lot of traders, especially new ones. When taking large position sizes, traders often get nervous, anxious, and uncomfortable. Their heart rate often starts to increase and one of the main thoughts that runs through their head is about the amount of money that they can lose. 

In a profession that requires interpreting data extremely quickly and making split second decisions, these feelings and thoughts can cost a trader a lot of money. When starting out, it is a good practice to take a small enough size to not notice the financial gain of winners or the financial pain of losers.