Committing the entire portfolio to one position, leaving no capital for anything else and no room for being wrong.
Going full port removes diversification, reserve capital, and the ability to add or to trade anything else. It also removes any distinction between the trade being wrong and the trader being finished.
The justification is usually conviction, and conviction is not a risk control. A position can be your best idea and still be sized at a fraction of the account; those are separate decisions, and collapsing them into one is what makes blown-up accounts possible. See position-sizing.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Working out a position size. Three numbers decide how big a trade is: the account, the share of it put at risk, and the distance from entry to stop. One percent of $25,000 is a $250 budget, and a $0.50 stop divides into that 500 times.
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