People who double down often fall into the "blow it all quickly" camp. This happens because the odds of making money short term in a double down scenario are usually pretty good, unless your timing is terrible. The problem is that over time, you WILL eventually get into a losing streak. If you just keep increasing position size, you will be toast. Very few pros use a double down strategy for this reason. When they are wrong, they bail.
I personally always get smaller when I start losing. Sometimes I even go on vacation!
Many traders employ a max risk per trade parameter, which automatically increases or decreases position sizing depending on performance. For example, if you never risk more than 2% per trade, it will take a long time to blow out an account as you keep risking on 2% of the account as it shrinks, thus risking less and less each time. Makes it almost impossible to blow an account if you know what you are doing.
I personally always get smaller when I start losing. Sometimes I even go on vacation!
Many traders employ a max risk per trade parameter, which automatically increases or decreases position sizing depending on performance. For example, if you never risk more than 2% per trade, it will take a long time to blow out an account as you keep risking on 2% of the account as it shrinks, thus risking less and less each time. Makes it almost impossible to blow an account if you know what you are doing.
