Skip to content
GetProfitable
Search
Dictionary

Reduced-size restart

Returning to the market at a fraction of normal size after a limit breach, and earning the right to scale back up with results.

A restart rule solves the problem of what happens the day after a limit fires. Without one, the choice is between staying out indefinitely and jumping back at full size with a chip on your shoulder.

A concrete version: restart at 50% size; return to 75% after five trades executed to plan; return to 100% after the account regains half the lost ground, or after fifteen trades at plan, whichever comes first. Note that the promotion criteria mix process and outcome deliberately - process alone can be gamed by inaction, outcome alone rewards luck.

The rule also produces useful information. If reduced size is followed by a sequence of plan-compliant trades and the losses continue, the problem is in the strategy rather than the execution - which routes you to live-vs-backtest-gap rather than to more discipline.

Related: drawdown-throttle, daily-loss-limit, live-vs-backtest-gap, process-over-outcome

Educational only, not advice. Spotted an error? Post in Site Feedback.