What is this quote trying to tell us?
As always, this topic is aimed at anyone interested in trading. The rest just keep scrolling. Although after the last week with some extreme drawdowns, it may also be of interest to some B&H investors 😅
Source of the picture: YouTube Mind Math Money
What are my reflections from my trading journal?
For the TL;DR my conclusion first:
The optimal position size is not the one that mathematically promises the highest profit. It is the one at which you psychologically stable, disciplined and clear remain!
Because in the end, it's not the bravest trader who wins. It's the one who stays in the game long enough.
In the course of my trading posts, someone asked me last year: https://getqu.in/cbIOkg/
"If you have an 80% win rate, why don't you just increase your position sizes? Then you would earn a lot more!"
A legitimate question, it sounds logical. Mathematically even absolutely correct. Pretty much at the same time as this question, I also started to raise my upper limit from 10k per trading position to 15k and later 20k last year. It worked, but I didn't feel comfortable. Something has changed. I couldn't put my finger on it at the time, but I felt it: These 20k positions are doing something to me.
In Q4 2025, I then consistently went back to around 10k per position. My absolute profit in euros was no higher in the end, despite larger position sizes.
Today I stumbled across a YouTube video that describes exactly what I intuitively felt at the time. I can recommend it to anyone interested in trading!
The core message is simple, but extremely important:
Position size doesn't determine your profit, it determines your psyche.
The following happens above a certain size:
- You you lose the ability to think clearly ("the ability starts to disappear").
- You no longer trade the market, you trade your account.
- Discipline fades into the background.
- Trading becomes less of a probability game and more of a psychological psychological stress management.
Mark Douglas, whose book is also quoted in this video, sums it up perfectly:
"The market is a probability environment. Your brain is not designed to operate calmly when too much is at stake."
Link YouTube https://youtu.be/yWOviauHmT8?si=_AQpcXk5URZ2ZmbT
The matching book recommendation: "Trading in the Zone" by Mark Douglas
$IREN (-4,72 %)
$RDW
$ZETA (-8,32 %)
$AMZN (-2,11 %)
$MSFT (+0,4 %)
