To increase position size - legitimate when it follows a rule, and one of the most common places a plan quietly dies when it does not.
Sizing up is neutral in itself. Systematic reasons exist: a larger account, a higher-quality setup grade, a wider edge, a scheduled scaling step. Each of those can be written down and checked.
The other kind arrives as a feeling - a run of wins, a strong conviction, a need to make the week back - and it produces position-size-creep and revenge-size. The test is simple and worth applying before every order: can I point to the written rule that produced this number?
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.
Educational only, not advice. Spotted an error? Post in Site Feedback.