Risk Management

Risk ManagementLesson 6 of 75 min read

The large account test

A question that settles most sizing arguments, why a small account should be traded exactly like a large one, and the spiral that starts when it is not.

The rule is simple to state and hard to follow. This lesson is about the following.

The question

Imagine the account is 200,000 dollars, not 1,000.

Would you risk 30 percent of it on one trade? Would you take ten trades in an afternoon on it?

You would not. You would size carefully, take one setup, and go and do something else.

Nothing about the chart changes with the size of the account. Only your behaviour does.

Trade the small account as the large one

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