Important batch discussion

One of the things I keep telling my consulting students is

lot size

matters

I have two important points about lot size,

First, "trade with your proper lot size."

Obviously oversized lots are NG, but

even more so, too small a lot is worse

The reason is that with a small lot you won’t take it seriously, and even if you hit a stop loss, the failed forecast won’t stay in your memory

For example,

a 0.1 lot trade (causing a loss of 100 yen)

a 10 lot trade (causing a loss of 1,000,000 yen)

Which one would you take more seriously?

And when you lose, which one would stay in your memory?

No need to say it—obvious, right

Humans are built that way

Haven’t readers had similar experiences?

When trading with a small lot

you end up thinking, "Whatever," or "Well, it is what it is," and you become lax

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What often happens is that your deposited amount becomes so small you can’t place the proper lot, and you start thinking, "whatever," and it ends up being just a pure all-or-nothing gamble

You force trades without thinking

Trades that do nothing good for you at all

And, of course, that last trade ends in a loss

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So, what is the proper lot size??

→ Naturally it differs from person to person, but emotionally, I think you should feel that “if I lose this amount, it’s really bad”

If you don’t feel that, then, as said, you will inevitably fall into the big or small and allow laxity

Second, "do not change the lot size"

Just because you made money, it’s NG to immediately increase the lot

At least look over a one-month span

What’s worse is lowering the lot size in the middle of trading

Lowering the lot does not increase the win rate

That’s just your laziness

Lowering the lot just postpones the risk of being cut off, and (as mentioned in point 1) trading with a lot outside the proper size will not benefit you

10 trades with an improper lot < vs. 1 trade with the proper lot

I strongly believe this

And above all, if you’re chickening out because you have little money, you should stop investing or gambling altogether

Because you don’t have the mindset to succeed in investment or gambling

End

Blog: Excerpt from "Insider Information of a Full-time Trader" article dated March 28, 2024