Risk and Size Management
In short-term trading, risk management matters more than being right.
You will take many trades. Some will work. Many will not.
Your ability to stay consistent depends on how well you control risk and size.
Why risk matters more in short term trading
Short term trades fail quickly.
Moves are fast. Reversals are sharp. Mistakes are punished immediately.
Without tight risk control, a few bad trades can erase multiple wins.
Sizing expectations
Your positions should be small.
Good practice includes:
risking only a small percentage per trade
assuming the trade can fail immediately
keeping losses manageable and repeatable
Large size increases hesitation and emotional pressure.
Small size allows clean execution.
Risk per trade
Before entering any short term trade, know:
how much you are willing to lose
where you will exit if wrong
whether the loss is acceptable
If the loss feels uncomfortable, the size is too large.
Discomfort leads to poor decisions.
Accepting frequent losses
This type of trading involves frequent small losses.
This is normal.
Successful traders:
accept being wrong often
keep losses controlled
focus on net outcomes over time
Trying to avoid losses usually makes them worse.
Avoiding compounding mistakes
Risk often escalates when traders:
increase size after wins
chase losses to make money back
abandon rules during active markets
These behaviors lead to drawdowns quickly.
Consistency comes from repetition, not intensity.
When to reduce size or stop
Reduce size or step back when:
execution feels rushed
emotions feel elevated
losses start clustering
discipline weakens
Stepping back protects both capital and clarity.
How risk management supports trading
Good risk management:
keeps you in the game
allows confidence in execution
prevents emotional spirals
makes performance repeatable
Without it, trading becomes unstable.