Risk and Position Sizing

Sizing decides whether an edge ever gets the chance to express itself. A method with a real advantage and the wrong size is a slower version of a method with no advantage at all.

Questions this section answers

• What risk per trade the record actually used, as opposed to the figure the trader believes was used. These differ more often than not.
• How size behaved through the worst losing sequence in the sample, and what that sequence would have cost at the size currently traded.
• Whether the longest run of losses observed is unremarkable for the win rate involved, or genuinely unusual. Traders routinely treat an ordinary streak as evidence that something broke.
• Correlation between positions open simultaneously. Four separate trades on correlated pairs is one trade at four times the size, and the account discovers this at the worst moment.
• The recovery arithmetic on the deepest drawdown in the record, and what depth the method can absorb before recovery stops being realistic.

Before increasing size

This is the section commissioned most often by traders who are profitable and want to add capital. The finding that matters is rarely the average. It is the tail: what the worst observed sequence would do to a larger account, and whether the sample is long enough for that worst sequence to be representative rather than lucky.

What to send

The same export used for a trade history review, plus the account balance history if the platform separates it. Balance over time is what makes drawdown measurable rather than estimated.