{"id":57963,"date":"2016-09-11T01:09:39","date_gmt":"2016-09-11T08:09:39","guid":{"rendered":"https:\/\/brookstradingcourse.com\/?p=57963"},"modified":"2021-05-27T04:55:20","modified_gmt":"2021-05-27T11:55:20","slug":"upsizing-advice-profitable-trader","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/es\/ask-al\/upsizing-advice-profitable-trader\/","title":{"rendered":"Ask Al: Upsizing advice for consistently profitable trader"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">Upsizing advice process and default sizes<br>BPA trading room Q&amp;A: August 1, 2016<\/h2>\n\n\n\n<p class=\"content-box-green\">Question: For a trader that is consistently profitable and now working on increasing size, can you offer any advice on a good process, and defaults for sizing up in your experience?<\/p>\n\n\n\n<figure class=\"wp-block-audio\"><audio controls src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/09\/Ask-Al-76-Upsizing-Advice-for-Consistently-Profitable-Trader.mp3\"><\/audio><figcaption><em>Audio duration: 4min 36sec<\/em><\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Make $1 million a year?<\/h3>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"alignleft\"><img loading=\"lazy\" decoding=\"async\" width=\"200\" height=\"188\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/09\/be-Happy-Post-It-Note.jpg\" alt=\"Be Happy Trading Smiley Note\" class=\"wp-image-57971\" title=\"\"><\/figure><\/div>\n\n\n\n<p>Yeah. I can tell you that it\u2019s real easy to do it too fast.&nbsp; Everyone wants to make $1 million a year, $5 million a year.&nbsp; Once you start trading well with one contract, three contracts, five contracts, you think, \u201cOh, why not 500 contracts?\u201d And there are many factors involved.&nbsp; The biggest one is <a href=\"https:\/\/www.dailyfx.com\/forex\/education\/trading_tips\/learn_to_trade_dollar\/2012\/03\/15\/How_to_Manage_the_Emotions_of_Trading.html\" target=\"_blank\" rel=\"noopener noreferrer\">emotion<\/a>.&nbsp; Once you start making pretty good money, you have to decide quality of life.&nbsp; You only get one life.&nbsp; You know, I\u2019m 64 so a lot closer to the end than to the beginning, and I want to enjoy my days. So it\u2019s simply less stressful not trading huge position sizes anymore, so I trade what I need to trade and I make enough money, and I\u2019m happy.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Take a chance if right time<\/h3>\n\n\n\n<p>If you\u2019re 30 years old and you\u2019re really hungry and aggressive, and you still have a lot of fight and you don\u2019t have a lot of personal responsibilities &#8212; kids, wife, stuff like that &#8212; you can take a chance.&nbsp; I told my three daughters &#8212; I have two lawyers in San Francisco on an MBA and LA. I tell all of them \u201cTake chances.&nbsp; Do things that &#8212; you don\u2019t have kids yet; just take chances.&nbsp; Go out and do anything extreme. Follow your heart and just do anything that you really think is exciting and risky.&nbsp; Now\u2019s the time to do high-risk things.\u201d&nbsp; But once you have kids, you have to reduce your risk. You need consistent, dependable income.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Always a second act<\/h3>\n\n\n\n<p>So I\u2019m not sure where you are in your life, but if you\u2019re young enough so that you can always make it back if you screw up &#8212; if you screw up 10 times &#8212; I also tell my kids, \u201cI don\u2019t care; go out and screw up 10 times; go out and screw up 20 times. I don\u2019t care. You\u2019re young enough you got a really good set of personal qualities; you\u2019re very smart; you work very hard.&nbsp; There\u2019s always a second act. No matter how many times you fail, you\u2019ll always be able to get back and do well.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Don\u2019t worry about failure<\/h3>\n\n\n\n<div class=\"wp-block-image shadow\"><figure class=\"alignleft\"><img loading=\"lazy\" decoding=\"async\" width=\"280\" height=\"186\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/09\/pc-burning.jpg\" alt=\"Trading PC Burning Up\" class=\"wp-image-57980\" title=\"\"><\/figure><\/div>\n\n\n\n<p>So if you\u2019re a reasonably confident person with good personal habits, I just don\u2019t worry about failure.&nbsp; However, realistically if you start trading too big, you start &#8212; at least subconsciously &#8212; being aware of the concept \u201crisk of ruin\u201d, okay?&nbsp; You can get ruined.&nbsp; You just know that <a href=\"http:\/\/www.investopedia.com\/terms\/b\/blackswan.asp\" target=\"_blank\" rel=\"noopener noreferrer\">Black Swan<\/a> events happen, and statistically it\u2019s very unlikely that you\u2019re going to lose 100 trades in a row.<\/p>\n\n\n\n<p>But guess what?&nbsp; It\u2019s theoretically possible, and there\u2019s some magical number of trades that if you lose in a row, even a small amount, your account is going to disappear.&nbsp; And without specifically thinking, \u201cOh, I\u2019d better watch out for that risk of ruin that Al talks about.\u201d You\u2019re not specifically thinking about it, but your personal radar tells you, \u201cUh-oh, this is dangerous.\u201d And what that radar is saying &#8212; although it\u2019s not using the words \u201crisk of ruin\u201d &#8212; it\u2019s telling you that you\u2019re at risk of dying as a trader. That your account might die if you risk too big, if you trade too big.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Survive\u2014Trade smaller than you think<\/h3>\n\n\n\n<p>So however big you think you should trade, I would probably trade a third of it or a quarter of it.&nbsp; All of us could trade much, much larger, but you don\u2019t want to put yourself at risk of ruination and you also have to have fun.&nbsp; You have to find the balance that\u2019s right for you, and it changes.&nbsp; It\u2019s changed with me at different times in my life. And your priorities change.&nbsp; And now I\u2019m in a very satisfying period in my life and I have a lot more flexibility over what I can do.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Question\u2014part 2<\/h3>\n\n\n\n<p>It\u2019s probably not directly answering your question, okay.&nbsp; More of your question:<br><em>Did you size up slowly and size down if you take a few losses?&nbsp; Can you continue to work up like in a bull\u2019s channel, stair step up. Increase to five contracts, lose some, get down to two contracts. Increase to 10 contracts, lose some, go back to three contracts.<\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Don\u2019t change size too often<\/h3>\n\n\n\n<div class=\"wp-block-image shadow\"><figure class=\"alignleft\"><img loading=\"lazy\" decoding=\"async\" width=\"200\" height=\"149\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/09\/trading-drawdown-graph-200px.jpg\" alt=\"Trading Drawdown Graph\" class=\"wp-image-57978\" title=\"\"><\/figure><\/div>\n\n\n\n<p>A lot of traders do that.&nbsp; I personally would not be changing the sizes all that much that often.&nbsp; So if I were trading three contracts profitably, I would wait several months and then go up to five. Because you don\u2019t want to be trading three contracts for two weeks and then up to five for two days, and then take a big hit, and then go back down to two contracts.&nbsp; You just start spending all of your time thinking about what\u2019s the right position size for today instead of thinking, \u201cIs this a good trade to take?\u201d So, if you change your position size three times in a month, you\u2019re changing too often.<\/p>\n\n\n\n<p><em>Al Brooks<\/em><\/p>\n\n\n\n<p><a title=\"Al Brooks&#039; trading room\" href=\"https:\/\/www.brookstradingcourse.com\/online-day-trading-room\/\">Information on Al&#8217;s Online day trading room<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n","protected":false},"excerpt":{"rendered":"<p>Upsizing advice process and default sizesBPA trading room Q&amp;A: August 1, 2016 Question: For a trader that is consistently profitable and now working on increasing size, can you offer any advice on a good process, and defaults for sizing up in your experience? Make $1 million a year? Yeah. I can tell you that it\u2019s [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":57971,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[159],"tags":[],"class_list":{"0":"post-57963","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ask-al","8":"entry","9":"override"},"featured_image_src":"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2016\/09\/be-Happy-Post-It-Note.jpg","author_info":{"display_name":"BTC Admin","author_link":"https:\/\/www.brookstradingcourse.com\/es\/author\/richardhk\/"},"_links":{"self":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/57963","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/comments?post=57963"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/57963\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/media\/57971"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/media?parent=57963"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/categories?post=57963"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/tags?post=57963"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}