There is a saying in the trading circle: "Small positions are for longevity, large positions are for quality of life."


But the question is: when should you take small positions and when should you take large ones?

This is not simply about being 'bold and meticulous', but involves a comprehensive consideration of probability, win rate, risk-reward ratio, and money management.

One, large positions are not 'gambling', they are 'calculation'.

Many newcomers get excited when they hear 'large positions', thinking it's a shortcut to double their money quickly.
But the truth is: large positions are not gambling, but a strategic action taken when probabilities greatly favor you.
In other words, if you don't even have a mature trading system and can't see the high-probability direction clearly, then taking large positions will only lead to quicker liquidation.

The correct logic:

  • First, have a high win-rate strategy.

  • Then confirm through backtesting that the strategy can bring a positive expectation over the long term.

  • Only when the 'system signal is extremely strong' should you consider increasing the position size.

Without certainty, do not take large positions. The premise of large positions is a statistical advantage.

Two, when is it worth taking large positions?

1. When the trading system shows a 'golden signal'.

For example, if your system has a win rate of over 70% and a risk-reward ratio of 1:3 or more in a specific pattern across the last 100 trades, then when such an opportunity arises, you can definitely scale up your position.

Key operation points:

  • Validated by historical data.

  • Extremely high certainty.

  • The maximum tolerable loss is within a controllable range.

2. Confirmation points for reversals at the end of a trend.

If you judge that the market is at a critical turning point and have sufficient volume and price patterns as verification, then you can consider scaling up.
For example:

  • Confirmation of breakouts and retests on weekly/daily structures.

  • Repeated validation of key support/resistance.

  • Significant signals at major trend turning points.

3. At the start of a major market movement, when volatility is expanding.

When the trend has just started, the phase of increasing volatility from low to high is the easiest time to capture large segment profits. At this point, small positions may miss the main upward wave, and appropriately adding positions can maximize profits.

Three, how to take large positions without getting 'heavily injured'?

1. Use 'tiered scaling' instead of going all in.

For example, if you have a principal of 10,000 U, normally using only 5% per trade, but during a gold signal, you can scale up to 15%-20% in three steps, instead of going all in at once.

The logic of adding positions is:

  • First, use a small position to confirm the signal.

  • Add positions only after the market moves in the expected direction.

  • The stop-loss point remains fixed and unchanged.

2. Large positions must also have stop-loss.

Large positions ≠ mindless stubbornness.

If a large position is likely to lose 10%-20% of the principal on stop-loss, then this trade is unreasonable. The correct approach is:

  • Keep the stop-loss fixed within 2%-3% risk of the account.

  • Control risk by precisely calculating the position size.

3. Profit protection is a priority.

After making a profit from a large position, do not be greedy to let the floating profit return completely. You can lock in profits through moving stop-losses or partial profit-taking.

Four, the psychological traps of large positions.

Do not take emotional large positions: for example, wanting to 'bet back' on the next trade because you lost the previous one; this mentality is the most dangerous.

Large positions are not the norm, but occasional opportunities: if you always want to take large positions, it indicates that you are not doing systematic trading, but gambling.

Five, large positions are a double-edged sword, but need a sheath.

Trading with large positions is like a double-edged sword; if used well, it can be devastating, but if not, it can easily harm you. It's an advantage for mature traders, not a dream for newcomers.

If you don't have backtest data and lack the confidence of stable profits, the best approach is: first learn to survive with small positions, then discuss winning with large positions.

The core of trading is never about 'gambling', but about 'understanding'. Only when you understand the market can you trade with confidence; avoiding traps is essential for steady profits. Instead of hoping for 'overnight wealth', it's better to learn the logic with me, making every bit of profit clear and understandable. Follow me@钱包守护者 to avoid getting lost in the crypto space; steady gains are the real deal!