How to win the trading game by adjusting your position sizes

The only way to win at trading is have larger position sizes when you are right and smaller position sizes when you are wrong.

You can adjust your position sizes when trading with multiple units

• Enter 3 units into the market (one unit could be 100 shares, or 50 shares, or 1000 shares, or 1 unit count be 1 option contract, or 10 contracts, etc.,you determine the unit size per your money management rules)

• Pre-determine 3 levels of stops and the minimum profit target (for example, if you enter the market at price of 50, you stop 1 could be 49, stop 2 at 48 and stop 3 at 47, and the minimum profit target at 53). Make sure your profit goal is larger than your stop loss point.

• Stagger out of your trades when wrong by reducing your positions. If the market reaches your stop 1, you exit 1 unit. If the market still against you, at stop 2, you exit another unit…if market rebounds, you still have 1 unit. If market continues against you, you are out of all units. Wait for next trade.

• If the market moves in your direction, hold on to all your positions until it reaches the minimum target price. STAY with ALL your positions until they meet the minimum profit objective.

• Once the price reaches your minimum profit target, you can exit 1 unit of your position for profit. Now with the use of trailing stops for the other 2 units, you are going to sit back and try to go catch a big move. Use a breakeven stop to never let a winner become a loser. You will never know when it will happen, but it is critical that you are there when it happens. Adjust your stops as the market moves with you

“Fear and greed are emotions felt when you don't have specific rules in place. Follow your rules, and the only way to have confidence in them is to test them.”

You can only do the above steps with MULTIPLE units, i.e., trading with multiple units
“…trading 1 unit size is a fool's game…” why?,

Ok, you entered the market. Now your positions show a small profit. Here is where the true test of your nerve will be played out. The natural tendency will be to take it. Will you be right? Sure, sometimes you will catch the top before it retraces, but when you get into a habit of doing that, you will miss the big trenders and you will curse and stomp around and there is nothing you can do.


80% of your Profits will come from 20% of your trades (Pareto Principle).