Why the arithmetic matters more than the analysis
Two traders can take exactly the same trades and end the year in completely different places, because one sized every position to a fixed percentage of the account and the other sized by feel. The edge did not differ; the survival did.
The maths on these pages is not complicated, and that is precisely why it is neglected. Run the position size calculation before every trade until it becomes automatic, and the worst outcome of any single loss is capped at a number you chose in advance rather than one the market chose for you.
- Risk a fixed small percentage of the balance per trade
- Size from the stop distance, never from the margin available
- Check margin after sizing, not before
- Compounding models are illustrations, not forecasts