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Revenge size

Increasing position size specifically to recover a loss, which turns one bad trade into an account event.

Revenge size is the sizing half of revenge-trading. The setup may even be legitimate; the size is not, because it was chosen from the amount lost rather than from the risk of the trade.

The arithmetic is unforgiving. Doubling size after a loss means one more loss puts you three normal units down. Two more puts you in territory that requires a rally to return from, which is exactly the situation break-even-effect uses to justify the next increase.

Size must come from a formula, not a feeling. Write it down, check it against the order before sending, and treat any deviation as a logged rule breach even when the trade wins.

Related: revenge-trading, break-even-effect, position-size-creep, size-up

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

How a position size is worked outAccount size, risk per trade and stop distance feed into one box giving the number of shares.ACCOUNT SIZE$25,000your capitalRISK PER TRADE1%of the accountSTOP DISTANCE$0.50entry to stopPOSITION SIZE500 sharesrisk budget: $25,000 × 1% = $250position size: $250 ÷ $0.50 = 500 shares
Working out a position size. Three numbers decide how big a trade is: the account, the share of it put at risk, and the distance from entry to stop. One percent of $25,000 is a $250 budget, and a $0.50 stop divides into that 500 times.

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