Hey trader,
You can win eighty percent of your trades and still give the whole account back.
Sounds crazy, right?
Yet, it happens more often than you’d realize, and for one of the most obvious reasons…
A couple of oversized losers is all it takes.
Every trade after that is just digging out.
In fact, outsized losses end more trading careers than any other mistake.
But it doesn’t have to be in your future.
You see, I came up with a simple, effective way to size trades. Not only does it fit inside a real portfolio, but it leaves most of my cash untouched.
This method is exceptionally effective because it uses drawdown math the RIGHT way, so I know when to hold the line.
Let me walk you through the idea and show you how to apply it to your own trading.
Being Right Won’t Save You
I look for one trade a day.
I want a shot at 60 to 100% on that trade. I also want to be right about 80% of the time.
That win rate sounds like a safety net. It isn’t.
Here’s the thing. What drains an account isn’t your win rate.
It’s the size of your losers against the size of your account.
You can nail eight trades out of ten. If those two losers are big enough, they take back everything the winners gave you.
A big drawdown also costs more than the money. Once you’re down a large chunk, every trade after that gets spent climbing back to even.
Nobody plans for that hole. It shows up because the size was wrong on the days that went against them.
A couple of oversized losers is all it takes. From there you circle the drain until you’re gone.
The Allocation Math
The fix is boring…
You decide your risk before you fall in love with the setup.
I run two sizing rules, depending on the trade. Let me show you both on a $100,000 portfolio.
They aren’t the same animal. Block Hunter Console trades run out about 30 days. The GEX trade is in and out the same session.
- Block Hunter Console. These are spreads, mostly verticals, and they get about 20% of the portfolio, so roughly $20,000. Only 20% to 25% of that sits at risk at any one time.
- Spread it thin. That risk splits across up to about 10 trades. No single position carries the day.
- The GEX day trade. This one is a single product, not ten, and it gets about 10% of a $20,000 allocation. That is near $2,000, and it is the ceiling.
Look at that day-trade number again. It’s small on purpose.
I might love the setup. I still cap it near 10%.
You see, the size comes from the account. The setup doesn’t get a vote.
The Cash You Never Touch
Sitting on cash is part of this job.
A trader carries a lot of it. Most of it never gets risked.
That isn’t a flaw in the plan. That IS the plan.
The cash can sit in an interest-bearing account while it waits. It earns a little while it does nothing.
It isn’t there for margin. It’s there so one bad streak can’t reach the whole account.
The rule underneath all of this is simple. You can’t risk it all, all the time.
Do that, and the drawdowns show up.
Then you’re digging out instead of trading.
The Forward Takeaway
Your next position size shouldn’t come from how much you like the trade. It should come from the account sitting behind it.
Here’s how to put it to work. Cap the day trade near 10%.
Spread the risk across a lot of small positions. Keep the reserve parked and untouched.
Do that, and one trade a day at a high win rate can finally compound. The losers stay small enough to live through.
Size is the quiet thing that decides whether you’re still here next year.
Brandon Chapman, CMT
Creator of Ghost Prints
