Position Sizing
Every pattern in this library fails sometimes. Sizing is what makes the failures survivable — three rules that decide whether your losing streak is a statistic or an obituary.
Fixed fraction (the 1% rule)
Risk a fixed slice of the account per trade — 1% or less. Ten straight losses at 1% is a bruise (−10%); at 10% per trade it is the end (−65%).
Violated the moment one position risks a double share.
ATR stop distance
Put the stop beyond the market's normal noise — a multiple of ATR — then size the position to fit the risk budget. Stop distance decides size, never the reverse.
Violated when the stop sits inside one average bar's range.
Think in R-multiples
Measure every trade in units of initial risk. Two losses and one 3R winner is a profitable system — the win rate alone told you nothing.
Meaningless if the stop moves after entry.