Why your best setup might deserve more risk than your normal setup
Breaking News To Trading Moves by Shirish Agarwal
Episode notes
Most traders are taught to risk the same amount on every trade. That protects capital, reduces emotion and prevents one bad decision from causing serious damage. But it also assumes every valid setup has the same quality. Some opportunities are stronger than others.
Your normal setup may meet the minimum entry criteria. Your best setup may also have cleaner structure, stronger confirmation, better timing, supportive volume and a more attractive risk-to-reward ratio. When several factors align, that trade may justify slightly more risk.
Not every valid trade has the same edge
A pattern may win 55% of the time overall, but one version may perform better when the higher-timeframe trend agrees, price reacts from a major level and volume expands. If your journal shows those conditions improve expectancy, treat ...