Trade Tiny To Win BIG

📈 TRADER PSYCHOLOGY

Looking at old ideas with fresh eyes can be incredibly valuable. One old idea is to Trade Tiny. The idea was to trade the smallest possible size of 0.01 units on all your trades even if you had a five or six-figure account and could afford much larger positions. My argument for this approach is that Trading Tiny eliminates almost all bad trading behavior. It allows you to trade much larger time frames with massive 200-300 pip stops because a loss on any given trade is only $20-$30. 💡📉💵

In the realm of academia and logic, size should not matter. It should simply be relative to your account. But in real life where psychology controls all - size is everything. Regardless of your account size, it’s still easier to lose $40 on $1,000 than $3,000 on $100,000 even though proportionally the latter is a smaller loss. 🧠📊

But of course, we don’t think in proportions or probabilities. We think in absolutes. So when we trade a strategy that is 80% accurate and hit 3 or 4 losers in a row we are ready to ditch it. That’s why pain in trading needs to be kept at an absolute minimum and Trading Tiny is the best solution. 🚫💔

By Trading Tiny, you can have the best of both worlds. You can keep your individual trade risk very small ensuring that you won’t pull stops or revenge trade or average down needlessly, but you can also generate a meaningful return even on a larger account by trading a variety of configurations for each strategy - diversifying by currency pair, timeframe and risk parameters. ⚖️💪📈

By dividing up my capital by ten or even twenty slices you can create a very powerful portfolio of trades that will aggregate to a meaningful return while taking tiny individual trade risk. 💼🔟📉📈

This is a very cool idea and I would have never thought about it that way if I hadn’t looked at my past work and applied the lessons from my current research. In trading as in life, getting young and old together can work marvels. 🌟✨👵👶