Learned something today – Learn to trade like you are in a bigger position size
The problem that I have previously while training on small position size is that I feel like I can risk my small portfolio and trade crazy moves like:
- Buy/ Sell premarket
- Buy when the market open
- Hold shares until the market open
- Buy too much late when it’s ready for experienced traders to lock in profit
- Short too much early when there is still MOMO and trendline didn’t break
- Didn’t lock in profit on the way and when the stock starts to reverse, I hold until it reach my 1% or 2% stop loss.
What I will be doing now to rectify the problem above is:
Trade like I am in a bigger position size. I will assume that my position is size is multiply by 10.
Eg. If I am only trading with $1500 position size, I will assume that I am trading with $15,000. This will therefore make sure that I take the Profits and Loss seriously.
I will keep on working on this rule to make sure I will never trade crazy stuff.