Competence Before Size

  • Traders should focus on developing their competence, establishing high-performance trading behaviors — and then, once the gains from working on these begin to bed down, size at last becomes a safe and significant P&L enhancer. The reason to increase size should be developmental, and not financial.
  • Once you increase size, you need to be able to sustain trading the larger size to get the positive returns alongside any losses, and not to get caught up in chopping and changing in a reactionary approach to your P&L swings.
  • When increasing size, it is important to move from the comfort zone into a stretch zone, not a panic zone.
  • Mentally rehearse taking losses at the larger size that you wish to move to. If you feel a bit uncomfortable that is normal, if you feel panic then the size is too much. Use this feedback to determine what size is best.
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