Position size and getting out

Size is the part you control

Everything else in a trade is negotiable — the token moves, the pool changes, the call ages. Position sizePosition sizeHow much of your bankroll one trade is allowed to risk, decided before the trade rather than during it. is set by you, before anything happens, as a share of a BankrollBankrollThe money set aside for trading, separate from everything else you own. you have actually defined.

Ten percent of the bankroll per trade sounds careful until seven bad trades arrive in a row, which in the trenches is a single evening. That is Risk of ruinRisk of ruinThe chance that a run of normal losses ends the bankroll before the strategy gets to prove itself.: the strategy never gets the chance to be right.

Pick the size that lets you take the next trade after five losses, not the size that feels right after a win.

Write the exit before the entry

An exit plan has three parts and all of them are cheaper to decide now: where you take profit, what makes you wrong, and how long you are willing to wait. Tokens that simply stop moving cost you attention, which is the resource the next trade needs.

The invalidation matters most. A position without one turns into averaging downAveraging downBuying more of a falling position to lower the average entry price., and averaging down in the trenches is usually just doubling a decision you already regret.

The first slice pays for the trade

Taking profitTake profitSelling a planned part of the position at a planned level, usually in several slices. in slices removes the need to be right about the top. The first slice returns your stake; from that point the rest is a MoonbagMoonbagThe part of a position kept after the initial stake has been sold back out. that cannot take anything from you.

Until a slice is sold, the profit is a number on a screen, priced against liquidity that may not be there in an hour. Selling the first part is what converts a good chart into money.

A trade you can defend

• Size chosen as a share of the bankroll, before the entry
• The level or the fact that makes you wrong
• The first take-profit slice, and what it returns
• A time limit for a token that stops moving

Tilt is a sizing problem

TiltTiltTrading to recover a loss rather than because the trade is worth taking. does not feel like emotion while it is happening. It feels like conviction: the size grows, the checks get shorter, and the next entry is chosen to recover the last exit rather than on its own merit.

The cheapest defence is a rule written when nothing was at stake — a maximum number of trades, a daily loss that ends the session, or simply closing the terminal after the worst trade of the day.