Trading is risky, and most day traders lose money. Read our full disclaimer.

Warrior Trading Blog

3 Tips For Increasing Your Trading Size

trading size

Are you trading with small size but want to know the best way to increase it for bigger returns? If so, then we have some great info for you below. Before you even think about raising your size and risk parameters you need to be making consistent profits. This is important because increasing size without trading with an edge is a good way to lose a lot of money.

Today, we are going to learn some helpful tips that will allow you to increase your trade size responsibly. So if you want to bring your trading game up a notch, please make sure to pay close attention to the information below.

Start Small

Before you jump into large trades, make sure that you have started small first. Start trading with around 1 to 200 shares until you see at least 2 to 3 weeks of consistent profits. This will help you build the skills and confidence needed to make larger and more difficult trades. Do this over the course of a few weeks to help you gain consistency.

Once you have become consistently profitable, you can start to look at increasing your size. By starting small, you will learn what to avoid and what works well without losing a ton of money. So make sure to slowly ramp up your trading amounts and give yourself enough time to be confident with what you are doing.

Increase Your Size Incrementally

Now that you have had consistency trading small amounts, it’s time to bump up your game and make larger trades. If you have been used to trading 100 shares, move up to the next level and start trading 200 shares. But when you do this, make sure that you take a look at your trading strategy and how you are managing the trade. A lot of new traders and even experienced ones will make decisions differently because of the increase in size.

This is very important to pay attention to so make sure to write down what you were thinking and how you handled the trade in your journal. See if you find anything that stands out and if you start losing money on the same trades you were normally making money, then scale back your size back down until you figure it out.

Dealing with A Losing Streak

If you notice that you have started falling into a losing streak with your new trade size, bring it back down a notch. Reduce the number of shares you are trading for a few weeks until you notice consistency in your trading. Review your journal notes and trades to see if there is something you are doing differently that can be eliminated.

Its important for new traders to understand that the only difference between making a couple hundred dollars and a couple thousand dollars is how much size you are trading. The setup remains the same and so should your strategy. You will have to increase risk parameters as you increase size but other than that its just a psychological game and as gain more experience with larger size, the more comfortable it will become.

Practice Scaling In and Out of Trades

As you begin to get into larger share size you will want to make sure you understand how to scale in and out of trades. Hitting a market order with 5,000 shares will almost guarantee you some slippage and even just a few cents is a lot with that many shares. A good technique to practice to take an initial share size and then add to your position as the trade works in your favor. So instead of buying 5,000 shares at once, buy 2,500 and then add to it.

Same goes for taking profits and stops. Place offers out once you are long a position so when shares spike up you already have orders out to take profit off the table. For stops, you may need to place a couple to make sure you don’t get hammered with slippage. However, if the stock is super liquid then it may not be necessary but keep that in mind when taking on large size.

Practice this technique in a trading simulator until you get it down. Remember that to get to this level, you will need to move up slowly. This cannot be achieved in a single week and it may take you several months to accomplish. But once you have master trading at higher levels, you will be rewarded with handsome profits that you can be proud of!

Final Thought

Trading is a journey so don’t expect instant success overnight. Take your time and learn as much as you can with each trade. Trading is one of the purest forms of meritocracy and is inline with being a professional athlete. Your performance is how you are graded and if you aren’t continually push yourself then you will never make it to the professional level.


Leave a Reply

Your email address will not be published. Required fields are marked *