---
title: 'If You Use a 1% Stop Loss, You''ll Never Live Off Trading (I''ll Show You)'
source: 'https://youtube.com/watch?v=-RCKmA93u0k'
video_id: '-RCKmA93u0k'
date: 2026-08-05
duration_sec: 2736
---

# If You Use a 1% Stop Loss, You'll Never Live Off Trading (I'll Show You)

> Source: [If You Use a 1% Stop Loss, You'll Never Live Off Trading (I'll Show You)](https://youtube.com/watch?v=-RCKmA93u0k)

## Summary

The video challenges the widely repeated advice of risking 1% per trade, arguing that it is not a universal rule and can prevent traders from making a living. It explains four key factors that determine appropriate risk per trade and provides a detailed lesson on scaling position size while managing psychological and technical barriers.

### Key Points

- **The 1% rule is not universal** [00:01] — The typical advice to risk 1% per trade is constantly repeated but is not suitable for all traders. It depends on trading frequency, capital, style, and drawdown.
- **Purpose of the 1% rule** [01:07] — Risking 1% per trade is meant to survive long losing streaks (20-50 trades) and give time to evaluate if the strategy works. It's a survival rule, not a profit-maximizing rule.
- **Four factors for risk per trade** [02:26] — The appropriate risk per trade depends on: trading frequency, available capital, trading style (e.g., capital manager vs funded trader), and technical drawdown (maximum consecutive losses).
- **Trading frequency affects risk** [03:06] — Scalpers making 50 trades a day risk more in total, while swing traders making 30 trades a year need higher risk per trade to achieve meaningful returns.
- **Capital size determines risk** [06:23] — With $500,000, 1% is meaningful, but with €5,000, risking 1% leads to frustration and non-scalability. Small accounts need higher risk to grow, but must be managed carefully.
- **Trading style and objectives** [08:44] — Capital managers must keep drawdowns low (under 10-15%) to satisfy investors, so they risk less than 1%. Funded traders need to be more aggressive to pass evaluations and make profits.
- **Know your drawdown** [10:55] — If your system has a historical max consecutive loss of 50 trades, risking 1% is too much; you should reduce risk. If max loss is 10 trades, you can risk 2-3% per trade.
- **Position size definition** [13:01] — Position size is the number of lots, contracts, or shares traded, calculated to match your stop loss distance and risk percentage. It's crucial for risk management.
- **Scaling size is not linear** [15:44] — Scaling from €1,000 to €10,000 does not proportionally increase profits due to psychological factors, market conditions, and execution issues.
- **Psychological barriers to scaling** [17:37] — Increasing position size triggers adrenaline and cortisol, making the brain perceive larger stop losses as threats, leading to nervousness and deviation from the plan.
- **Technical and psychological causes** [20:04] — Discretionary traders face responsibility for real-time decisions, which can erode self-esteem. Lack of trust in the strategy and insufficient experience also block scaling.
- **Money management and cushion** [23:27] — Having a financial cushion (profits set aside) makes it easier to risk more. Without a safety net, traders become emotionally attached to money, hindering size increases.
- **Need for a scaling protocol** [26:32] — Most traders improvise size increases based on wins, which is dangerous. A pre-defined protocol based on behavior (e.g., following the plan) is essential, not based on money results.
- **Psychology and relationship with money** [28:59] — Your upbringing and financial education affect how you handle risk. Coming from a humble background makes larger stop losses feel like threats (e.g., 'this $1,000 pays my rent').
- **Fear and learned helplessness** [31:03] — Past trading failures can create learned helplessness, making the market seem like an enemy. Overconfidence from other life successes can also block scaling when trading doesn't go as expected.
- **Desensitization as a solution** [33:25] — Gradually expose yourself to larger position sizes, like overcoming a spider phobia. Start with small increases (e.g., $10 to $20 to $50) to build tolerance and reduce fear.
- **Use external protocols** [37:51] — Base size increases on behavior (e.g., following the plan 95% of the time) rather than on winning streaks. Have a pre-defined plan for when to increase and decrease size.
- **Withdraw profits to stay motivated** [40:05] — Withdraw some profits to make the money tangible (e.g., buy something, pay for a dinner). This reinforces that trading is real work and helps maintain respect for money.
- **Mirror account and worst-case thinking** [42:20] — Use a mirror or demo account to practice larger sizes without risk. Also, think about the worst-case scenario (e.g., losing $3,000 equals 3 months of rent) to respect money and avoid reckless scaling.

### Conclusion

The 1% risk rule is a survival guideline, not a one-size-fits-all solution. To live from trading, you must scale your position size using a structured protocol that accounts for your capital, style, and psychology, while gradually desensitizing yourself to larger risks.

## Transcript

Hello, traders.  Okay, traders, I'm sure you 've heard the typical advice hundreds of times always risk 1% per trade.  OK?  I understand that. constantly repeated on social media.  It doesn't matter if you do scalping, day trading,
swing trading.  It's like a kind of universal capital management, you know, that in your trading account, everyone recommends, they tell you, trade."  Well, in this video I'm going to explain this to you for the first time; I assure you that you
internet.  I've watched a lot of videos and I've never seen anyone explain in such detail what I'm going to explain here.  The reason why this idea of ​​risking 1% per trade is honestly complete nonsense, and
is the main problem why many of you, even if you manage to reach lose, where you no longer lose absurd amounts of money, but where your trading is more or less working, never manage to live off trading, never
manage to earn enough to feel that this is worthwhile.  And look, I'm not saying that risking 1%, this 1% rule, isn't a screen, the main objective of applying this type of capital management rule
that everyone tells you about is because, as you can see, if you risk 1% of your account for each of your trades and you enter a losing streak of 20, 30, 40 trades, even 50, even if you're constantly losing,
a more limited percentage because you've been risking 1% of what you have left in the account, and that makes you survive longer. This helps you realize that if there comes a point where you lose 50 or 60
consecutive trades and you don't understand that something is wrong, then it's best to quit trading.  That gives you breathing room, survival time to decide whether to or not.  So far, so good.  In other words, it's a rule that's fine at
first, but when you turn that universal rule into something that everyone must apply, that any type of trader, regardless of the type of trader they are, uses, must use, that's when
people who trade never end up making a living from it, because even if they make money, they make such a small percentage that they don't feel it's worth all this leads us to a much more important question, which is what
this video is about: if 1% risk per capital isn't what you should as a trader, risk in my account to be able to make a living from this?  So, let's first go over the basics of why risking 1% per
trade on your own doesn't make sense, not always, but rather depends on the four factors to you, as you can see here, okay? Four elements that you have to take into risk for each of your trades, and know if 1%
instead you have to risk less or you have to risk more.  That's the first thing, and then we're going to move on to a whole lesson on how to increase the size of your account, how to scale your profit, your risk, uh, to be able to live off this, while still keeping
the risk under control and knowing that here you have to be a capital manager, okay?  So, as we can see, the first important element in knowing how much to risk, 1% more or less, is
your trading frequency.  If you're a scalper, for example, who makes 50 trades a day, and you risk 1% on each of your trades, as you can see, it would be a period of negative streak, like the one
anyone can have in their account, uh, I could lose, and I'm telling you, uh, absurd amounts of money that don't correspond to a good Trader, as you can see here on screen, if you make 30 or 40 trades over the course of a
per trade, because your projected annual return would be absurdly low.  Because if you take risks and make 30 trades a year and only make 1% per trade, that implies that even if you have a very
probabilistic terms, the results you would have after deducting commissions, anything surprising, which is why you wouldn't be able to live off trading, unless first important element in determining whether you risk 1%
of your account or not is what type of trader you are, what type of trading frequency you have, whether you are a scalper, hyperscalper, day trader, swing trader, uh there are many elements that make you have to risk more or less.  So you can't
regardless of the type of trading you do.  Traders, give me a minute especially excited about.  Many of you know that I have been sharing information psychology, and financial markets in general for years, but for the last 2
years I have been participating as a teacher in a training program that I honestly never thought I would be a part of.  And this year I am once again teaching the specialization course in multi-market investment and diversification
with the University of Esperdes.  I'm especially excited about this, probably like many some of their channels, like Visual Politic or Visual Economic, right? Visual Economic himself and some of his professors such as Juan Ramón Rayo or
Within the course, I personally specialize in, and dedicate myself to, the psychology of investment because, as you well know, and something I have treating traders and investors in private psychology sessions,
is very important in investing and trading.  There is a lot of most participants end up losing their money, and therefore not But that's why I always tell you that it's important, in parallel with
learn to manage your money, however little it may be, whether you have 500, 5000 or 500,000 euros, it doesn't matter. What good financial health and, as a market participant, that you make sure
n't lose value over time due to inflation, that you protect it, and if you manage to make it grow, all the better.  And that's why I find this station anyone involved in the world of trading, because it's not training
have here in this trading niche, but rather serious people, professionals from each of their sectors who have come the most professional training possible. Therefore, I invite you to join us on June 21st, just a
live presentation of the course. There you will see who the professors are , what modules are included , how many credits they represent (since it Espérides), what content you will find in the course, and
.  I personally have been lucky enough to take the course, to see it, find anything like it anywhere else .  So check out the link I've left multi-market investment and diversification course from Visual Business
key factor, as you can see here on screen, is the available capital you have in your account.  If you have $500,000, for example, in your account, or $1,000, percentages like 1% make sense, since you have
enough capital for that percentage to correspond to live off of, be at ease, and not have to risk more of your capital.  But obviously, as you can see here, if you have €5,000 or €10,000 or
$10,000 to trade with, and that's the most you have, you can't just because you'll get into a loop, as I mentioned before, of non-scalability where you'll get frustrated. You'll see that
system are good, that you have mathematical expectation, that you're able to beat the manage to earn enough to feel satisfied and realize that this is a profession. So you have to plan for some kind of
scalability, a scaling plan that makes you realize you're taking on more risk than a € 500,000 or €1 million account would, because your current financial situation doesn't allow you to generate the necessary returns to
live off this.  That's taking a risk.  You know that this increase the probability of large losses, but it is necessary if you want to scale your trading and grow your account.  So,
obviously, the second important factor in determining whether 1% is a suitable number for you is your capital.  Your trading account, the capital you have, defines the risk you have to take.  And here many will
do the same with €1,000 as with €1 million.  It's false, it's a lie.  Well, it's not the same to operate with a € 1,000 account because of what that money implies in nominal terms, compared to what it implies in percentage terms when you have
€5,000. Because when you start trading with little money, your that account sustainably, obviously sustainably, not by risking someone with much more money would risk, because nominally the
impact of a 50% loss on €5,000 is not the same as on € climb the ladder, as you grow, that risk is weighed down so that little by little you become more conservative, you expose yourself less to risks, and you manage to make
the variance, let's say, allow you to survive longer in the you have little capital, you don't take certain risks here in trading, it's difficult, generate large amounts of money. Another important element, as you can see here
on screen, is the trading style you use, in terms of what type of trader you are, and how you want to make a living from trading.  In other words, it's not the same, for wants to manage third-party capital, because then your goal will be to
very controlled drawdown so that it's within the parameters of some capital management company, which allows you to gradually increase your investment level, and therefore you
always risk a very small percentage in your trading account, less than 1% probably to try not to the drawdown levels set by that company.  If you're that type of trader, risking 1% per trade is quite tricky and dangerous, because that
means that in a negative streak that everyone goes through, you can end up everyone goes through, you can end up losing more than a drawdown of 10, 15%, 20%, which scares many investors. Therefore, you should try to stay
implies a higher level of risk assumption than you your risk according to market volatility, the type of asset you trade, and where you are in terms of results.  There is a
defined by always risking 1%.  But on the other hand, if you are a funding trader, which I know many of you are, it is totally absurd to giving you leverage, buying power, they 're giving you, uh, virtual capital
which has cost you a very small percentage of money, $100, for example, $200, so risking 1% of $ 50,000 of buying power or $100,000 is absurd to do because you'll never reach the
it worthwhile.  So when you're a fund trader you have to be much more aggressive than a capital manager trader, but most people use that 1% in any type of trading because they think it's
standard, and it's not.  They are different paths, they are different objectives, and therefore your performance as a capital manager must be different in each one. capital manager and as a funded test trader , for example, the same strategy
applying 1% of capital because the conditions, the market environment is different things.  The last element, as you can see here on screen, which is more technical, also has to do with knowing your drawdown, your
historical statistical data of maximum consecutive losses.  Uh, most consecutive losses your system, risk. Let's imagine a system or strategy whose
historically loss pattern, even if not the maximum, is 40, 50, or 60 trades, which can happen in a certain period of time.  If you do n't know that number exists, you
risk 1% per trade in your account and end up losing 50 or lose, right? less in an irrational and uninformed manner .  If it's a phased- down plan and you want to expose that risk, that's
this data exists, this withstand without breaking down, then you are risking more than you should.  If you have 50 or 60 consecutive losing trades, it's probably best to reduce your
risk.  Uh, you need to know that you're going to have to deal with periods of therefore you have to lower that risk.  But it's not the same if you don't know your dropdown and you don't know that your system is, I don't know, let's imagine an
extreme case of a system or strategy whose maximum consecutive and historical loss is 10 trades.  If you risk only 1% on each of your trades, you conservative to scale up.  In other words, it's all well and good because you'll
earn enough to make it meaningful. You should probably be taking a risk-for-two or three-for- three chance of risking 2 or 3% on each of your trades.  It is understood that it depends a lot on the technical drawdown you
have at the trade level, on how your series of trades is distributed; that 1% so this is one of the first things, into account are basic to determine how many sizes, how much
position size, how much risk you should assume for each of your trades.  But what I want you to understand, which is the first step and what most people is not so simple, which is the more psychological part, the one that has to do with
throughout these remaining minutes of video, through a class on increasing the size, how to think about how to increase the size, why it is so block you, what tools you have to use to be able to do it
the magic begins for me.  Okay, first of all, let's give a because many of you may be confused about that.  As you can see here, the size or of shares or contracts, lots, or units of a financial asset that are
OK?  Determining this size is crucial for risk management, invested capital with risk tolerance. In other words, when we think about size, regardless of the market you operate in, it's one of those Anglicisms that they
instead of saying position size, you say size.  Uh, where do you mean if you're a Forex trader and you're trading, for example, with five micro lots, that's your size, right? So, you have to calculate, for
what risk you want to take, for example, 1% of your account, 2%, whatever.  And of lots you're going to use in the market so that it corresponds to the number of pips you put, right?, as a distance from your stop loss?  If you're a
with contracts, right?  If you're in the Nasdaq and you know that a micro is $2 or a mini is $, then you have to know where your stop strategy, and calculate the number of contracts you have to use so
positively with what you expect, right?, from your risk.  Uh, the same thing happens with stocks, uh, the case I mentioned, right? With American stocks, for example, how many shares you have to buy of a company, of a stock on the stock exchange, so
a company, of a stock on the stock exchange, so that your risk corresponds to the size you want to assume, right?  In other words, if you say, look, I want to risk $500 of maximum risk in this portion, how many
if the market is going to be right for me?  No?  Well, that's the size. What's happening?  The size chart isn't as simple as it seems, is it?  Because what many people do is use a
say, look, I'm a Forest trader and I always use 1% for each always use a mini lot for each of my trades.  That's a mistake.  Or 1000 shares.  That makes absolutely no sense.  At first it's fine
because that's when you're learning and you have to, let's say, make Making behavioral decisions as a trader is difficult enough, finding the right strategy in the market that executes well, without having to think about how to
weight and manage your position size.  But there comes a time when weigh your position size for many reasons, as we'll see now, and to make sure that's right and that you're really squeezing the strategy to its full
potential, right?  So to speak.  So, in short, this is the size, number of lots, contracts, or shares you use to adjust your stop loss in the market.  OK? Perfect.  So what's the problem?  If
scaling the size?  Because if you say, look, it's the typical myth, right?, that's saying, if you make money with an account of 1000 euros in trading, you'll Unfortunately, that's not entirely the case.  OK?  I wish it were that way, but it's not because, well, paper can't
in Excel or on your calculator, you might say, "Look, if I can earn x amount of money with €1,000, then if I proportion. So, I'll earn more and more each time ." On paper, that makes perfect
reality, many factors prevent it from working that way. Okay? For example, everyone has a different psychological risk tolerance depending on whether they're used to having money, whether they're short of
they have a job outside of trading, or whether they're unemployed. There are many factors we'll problem when increasing position size, when trying to scale that risk to earn more, isn't usually a lack of technical knowledge.
have sufficient technical knowledge. What's your strategy? You already know what you have to do, you already know how to find an edge technical issue, but rather, as you can see here, an inability to execute the
risk. Many stories get blocked at that point. That is, it's like you strategy, you win with it, you do it with €1000 and it goes very well, you go up to €5000 and it goes well, but if you go up to €7000 or €8000, that's when you get blocked, you start overtrading, you start
trading, and you take fewer trades, you let your stops run longer, you don't close your profit going in your favor, you cut it quickly because there's too much terminal. Then there are psychological factors in real time that
block you and cause your performance, your behavior, the one you same way, and that distorts your results, okay? And prevents you from ever reaching your full potential, right? What's
going on there? So, as you can see, there are several elements, several sources, so to speak, that make it difficult for you to increase your position size. Okay? First, on a nervous level, remember that our bodies activate
automatically, okay? Even if you work a lot on meditation, even if you get very used to trading in the markets, your body still acts based on survival; it's pure protection.
Therefore, when you expose yourself, for example, to a stop loss that gets larger each time you increase your position size, that's a threat to you. In other words, your brain is interpreting that if you enter that trade with the determined size and
end up losing money—and that money is a lot of money for you, conceptually speaking—let's imagine you come from a humble family where the in a situation where your stop-loss order is worth your parents' salary
, right? If that happens, which is very common when things are going well, your brain assumes that that amount of money is a threat if you lose it, because you're not just losing money, you're losing your
translating that to the real world , "Wow, if I lose this parents have to eat, for example." Therefore, it's a threat, it's something that's attacking you. That automatically causes your body, your brain, to
substances like adrenaline and noradrenaline, which are cortisol, which increases your fight-or-flight response , your defense mechanisms, because it's therefore, if you increase your adrenaline levels, for example, that leads to
your pupils dilating. Blood starts flowing to the muscles, you're more tense because your body is preparing to flee, to run, to fight, to defend yourself. That also activates your
words, even if you're a good trader, you have a winning system, when you reach 're not used to and your brain interprets as a threat, , which starts releasing certain hormones that you control and
that make you feel strange and you start to get nervous. Then, those nerves throw you off balance, they unbalance you, and you deviate from the plan, okay? Because assuming the risk as it should be, but as the threat it poses to you. Do you
understand? That's on a somewhat hormonal level. Then there are technical causes as well, okay? Many traders, for example, want to increase their position size, they want to have real capital in the market, they don't have mathematical expectation, they're
discretionary. And the  Discretion implies making decisions in real time. And that means that if you make a mistake in that real-time moment, it's that has failed, not the market, but because you made
incorrect decisions. And that's very hard to bear mentally, and it's very frightening, make decisions in real time because you're a discretionary trader, because you're someone who doesn't look for data to make decisions and therefore
here the responsibility is yours. And if that day you end up losing more hit a stop loss you shouldn't have, because you increased your position size too early , whatever, you'll go to sleep with enormous physical discomfort and you'll be
the stars, thinking, "Why did I do that? You're a bad trader." This constant internal narrative destroys you from the inside because, let's say...  It destroys your self-esteem, it starts to erode your self-concept
, how you see yourself in the mirror as a trader, it diminishes over time. It's as if your self-image begins to suffer, and that makes it even harder front of the charts and execute your system as you should, which, I repeat,
levels of risk, but when it exceeds those risk levels, it starts to fail, you understand? So, technically speaking, it's very trouble increasing their position size to be a trader who doesn't yet trust their
skills as a trader, who perhaps hasn't been trading long enough, or hasn't fully developed their skills, or hasn't yet found their right profile as a trader. When , you make a sufficient number of
trades, thousands of trades in certain environments; that is, you've seen the traded in upward trends, downward trends, sideways trends, high see all that  Depending on the market regime and because you've been
easier to increase your position size. This way, you know that your strategy suffers at certain times, but then recovers, or if there's a drawdown, you usually manage to recover and get out of it. In other words, the
risks you might consider dissipate, disappear, because you've already experienced them, and that knowledge gained from your less afraid, right? It's a matter of exposure, failure,
you're a trader who's just starting out, you've been at it for a year or two, you haven't seen enough, and you want to scale very quickly, it's possible that you'll scale, increase your position because you enter a drawdown, lose more money than you should, and get
everything you do afterward, even change your strategy, right? This is what "Damn, it's  " Every time I increase my position size, I lose money." And that's usually because, since you don't have a
your strategy works at a data level. You're discretionary, and that's fine, but it has negative conditions like this: you always increase the size when you're winning, when you have a winning streak, you win, you string together a series of
lot, you get confident, and therefore you increase the size to win more. And due to variance, the strategy goes through fluctuations in profits and stops. You increase the size probability, there's likely to be a
the increased size, and that affects your psychology, and so on. Second issue of discretion, and so on. Third point that affects increasing the size, as you can see here, is money management. And that is, if you don't have a
increase your position size quickly because you want to make money, you're likely to not
're a trader who has made money, going from $1,000 or $2,000 or $ 5,000 to $10,000 and building up a $ 5,000 cushion, it's easier to risk that $5,000 because it's a cushion you generated with your own money. But if you don't
have that cushion, it's very likely that if you want to increase your position size and you've only made a small profit, and you're already training to increase it, the because you'd enter the phase of losing your own money, and that has a significant impact
, right? Having a cushion generated directly from trading is crucial. Then there's important cushion: if all the money you have in the world is what you dedicate to your trading account, it's quite likely that you'll...  You become
very emotionally attached to that money. That money is a treasure to you, not just something you have to protect. And when you have to protect that money at all costs, it's very difficult to detach yourself emotionally from the
you have to take a certain risk and you see that money turning against you and you losing a tool, part of your do, but you're also calculating it based on what you can
can pay for a trip with my girlfriend or partner," "I can go somewhere," "I can buy, I don't know, the clothes I want," " I can buy food for my children." In other words, you end up transferring the money you're losing when you increase
the size to everyday things in life, things you shouldn't be doing that are equivalent to that money, because you don't have a safety net, you don't have financial security elsewhere, there's no way to say, "If I..."  I risk this money here
money, which is meant to be lost, it's not going to impact my daily life, all agree on that. So, you have no safety net, no only do trading and therefore don't have a job, any
extra income streams to offset the risk you take in trading. That makes increasing your position size difficult because if you increase your size and lose, and there comes a increasing your position, the amount of money you're losing
can't be recovered any other way than through trading. Your main source of income is trading, and therefore if this fails, there's nothing outside to compensate for that situation. That's scary, that paralyzes anyone, and therefore makes it
climbing because you know that if you keep climbing and that happens again, do it. You get stuck, paralyzed, you settle, and that's always have parallel income streams , whatever they may be. If that makes it
everyone has those difficulties, but if you find yourself struggling, it's while you scale. When you reach a scalability point where you see that you have enough money to cover your
money to cover your daily expenses without the risk of losing it while not, it's important to always have something to support that growth so you can be at ease and do it in the purest way possible. Okay? Perfect. And
important point in money management is that most people I see who do it badly, and they make mistakes, they don't have a plan, they don't have a scaling protocol at a monetary level. That is, if you don't mentally distribute how
increase your position size, you'll probably have to improvise. And improvising in the because then the "what ifs" will start: the "what ifs," the "what ifs," the "what ifs."
because your decision will never be satisfactory. If you increase your position size wrong. If you increase your position size and make little profit, you're dissatisfied because you could have made more. It's always unsatisfying . Therefore,
if you want to increase your position size and earn more, it's important to do it outside Excel spreadsheet, whatever you want, a whiteboard, a piece of paper, and say, "Okay, when am I going to increase my position size?" I'll increase it when I have a winning month,
when I stick to my plan 95% of the time, when... I don't know, there are many When I achieve...  Um, a certain R number for my risk. There are many on which is the best, which for me is that you have to try to isolate yourself from
even if you lose, because if you do your job well, if, uh, for a month, for example, trading, you have followed the plan perfectly, even if you things right and therefore you have to increase the size because your behavior
the money, is a different thing because you can make money doing things wrong. There's nothing you can do about that, that's a sure loss in the future, but if you do things right, regardless of whether you win or lose, you should increase the
size. Okay? It's an external protocol from outside that has to be transferred to trading. Many traders, most of those I see who have difficulty increasing their size, what they do is uh, improvise, that is, you win and when you
feel psychologically good you increase the size, problem, because there you are That size is arbitrary, based solely on a result, an output related money, but you don't know if you earned that money fairly. What if you
made two mistakes, or if the market was incredibly favorable, making you and then the following month it hits you with a regime that wipes out your account? In other words, you do moment is the right time because you might have made a lot of mistakes.
very good trader, so you increase your position size, and the losses, which is what has to happen sooner or later, and it destroys your account, okay? So, always use external protocols for increasing position size. And
influences the difficulty of increasing position size is psychology, and that's where I come in, so to speak. Not everyone has said before, it's not the same, even if it's unfair, but that's the way it is. That's how it is.
financial stability, optimal financial health, where, for trading account, absolutely nothing happens because you have financial security, it's different from someone who comes from nothing, who doesn't own a home, whose
parents live in a rented apartment, or who lives in a rented apartment, who doesn't have enough income to sustain certain levels of risk. That kind of experience and relationship with money
directly influences how you're going to relate to trading now, because the give to money, is different; it's a different conception. When you come from a family that has educated you financially, that has explained to you that
many ways to make money, it's taken a bit less weight off it, right? Because in the end, there's money, and when there's money, the connection you have with it is valued a bit more; it 's easier to move up, to expose yourself to losing money, because you
've developed a kind of healthy relationship with it.  Even if losing money isn't catastrophic because there are other options, it's not. But if money is everything, and protecting it means whether or not you can eat in a month, or whether or not you can pay the electricity bill,
stake is much harder. Because, as I said, you're going to transfer what you lose when you increase your stake, and the money you're risking, to your daily living expenses. Since you have to go, for example, from risking $100 or $50 per
stop loss to risking $100 or $1000 per stop loss, that $100 or $1000 isn't just a number for everyone. If you come from a humble background, from someone who has , you 're probably thinking, "Wow, if I hit
this $1,000 stop loss, that $1,000 pays my rent." risk you're taking, and therefore it's harder to break that block.  Okay? So, in terms of your relationship with money, it's important. Then there's fear and
traumatic experiences, for example, with trading, in that previous attempts at trading went badly, you tried strategies that were told were good and failed and lost money, or you thought things went
well for a while and then lost everything, or you made a wrong decision, didn't close your stop loss and lost an account. If you have those trading, it's very likely that increasing your position size and taking
more risks will become increasingly difficult, because it's something called learned helplessness. You are, and have learned, as the word suggests, to be helpless against the market. The market becomes an enemy to you,
who is going to destroy you in an instant.  that I can.  And therefore, if you feel there is beast that wants to devour you, want to expose so much money in the market because you're afraid it will
take it away, right?  So that's going to block you.  The opposite will also happen who has enormous overconfidence in yourself.  In other words, you come from a traditional world where you have been
has valued you greatly, where everything has worked out very well for you.  If that's happened and you come here to trading and suddenly you start to see that you're not as good at it as you thought, that what you believed you'd be successful at here isn't working out
as you expected, that the difficulties are greater than you thought, that's when the starts to hurt you, it starts to be a burden here because you're seeing that you that's also going to block you, okay?  And finally, low
words, we go from someone who has been very successful in everyday life to someone who has perhaps been vilified at work, who has not been valued, who is not considered mediocre by their family, who has not been
ways of seeing yourself with low self-esteem, unfortunately, in which really are.  And if you have that low self-esteem and you bring it into you see that your fellow traders, for example, are risking $1,000,000
do it.  You're going to fall behind because you think you're not capable , that you're not the one who deserves it.  And when you don't feel you self-esteem, it's very difficult to keep up with the pace of climbing because you think you
're not worthy, that you're not capable of taking that kind of risk. causes, what solutions exist for size increases and blockages?  No, let's go propose, which is the one I always try to explain because it is undoubtedly the best,
is what is known as desensitization, okay? television program that I always try to refer to because I think it is very visual for it, which was called La Caja, I think, here in Spain
They made a program in which if you want to overcome a phobia, for do, as I think everyone will understand, is expose yourself, put a spider, a tarantula, and put it on your face like you're alone at home.  Hey my
little one, I think that's what you call it in Latin America, right?  That scene where, spider on your face, it's going to make you feel scared, afraid, scream, angry, whatever that, what you want is to overcome your fear of spiders, what you have to
do is do it gradually. You first have to look at an image on the calm environment of a spider and say, "Okay, here's a picture, a picture doesn't n't do anything to me."  When you see that your nervous system is calmed by looking at that
photograph, you move on to a video of the spider, it's already moving, ugh, how disgusting, I'm , I see that I'm starting to hyperventilate a little because I don't really like watching pictures of spiders, but anyway, I watch it, I calm down, I drink some
used to it and my body no longer reacts the same way and I see that I am able to while watching that video, the following happens, which is that now I will see a following happens, which is that now I will see a spider in a glass box 10
meters away from me.  Little by little you make your fear of the spider, of spiders, become visible and confronted.  You gradually accustom your body to developing a tolerance to that fear. barriers, you gradually realize there's no danger, no danger, no
danger, until finally you touch it, you caress it, you put it on top of you and you because you've seen that there's no risk, they explain it to you, professionals come to you, I don't know, I do n't know what they're called,
spider professionals, I don't know, I don't know what the profession is called, but a zoologist, "Look, spiders do this, they do that , they don't bite, they bite."  They give you explanations about it, they tell you what risks there are, they give you valuable information
afraid of spiders, when not to be, so that your irrational fear disappears.  If you do that desensitization process well, remember that you are very sensitive to spiders at the beginning and little by little you become
tougher towards it, you lose sensitivity to that fear.  This process of awareness in size occurs in the same way.  It's not the same as a life, let's imagine that in your daily life, uh, you're used to
winning, uh, here in Spain, right?  €1,000, € 1,200, €1,500, these are the average salaries, used to those income levels, you can't assume a stop loss of 1000, that is, going from one of 50 or $ to one of 500 or 1000. If you make such an
explosive jump, it's like being afraid of spiders and putting one on your face.  So, generate adrenaline, as we saw before, you'll be irritable, anxious, you'll irrational, etc., etc., right? Therefore, the process had to be very
have to start by exposing yourself to $10, then from $10, when you see that everything works, you move on to $, then from $ to 50, from 50 to 100. And so little by little you go through as the size increases, the position increases and your brain
drug, if you take a drug for the first time, that drug is going to affect your nervous system a lot because the impact that drug has is new to your system and therefore it reacts a lot.  Your receptors will be
fully active.  When you are exposed to that medication or drug a lot , your receptors become less sensitive to it, they are not need more and more doses to have the same sensation you had initially.
The same thing happens here.  If at first a stop loss of 50 causes you a little stress, the more you expose yourself to that 50 and to more money little by little, the less sensitive you will become because you have done it so many times, you have
seen that you have lost $100 500 times and nothing has happened, you have feel very comfortable now, I'm going to go up to 200."  With 200 you'll lose, you'll be a little because you've done it 500 times, you'll go up to 1000 or 500 and so little by little you need more and
the same feeling you had at the beginning.  Is create a size upgrade protocol. OK?  Perfect.  Uh, second desensitization, the protocols I was telling you about.  Protocols, what do I mean?  I
mean, as I explained before, size upgrading protocols.  You can base your size increase on how good you are, because if what you do is 're falling into the bias I mentioned
before of overconfidence, of confirmation bias, where you think you're amazing, that you've cracked the algorithm that makes you money in ATM at home to withdraw money, but perhaps what has happened is that the
market regime that is occurring corresponds, correlates exactly with your strategy. And that makes you make money for two, three, four months.  And that makes you increase your position size, increase your position size, increase your position size, win, win, win, have
incredible months, and then suddenly there's a month after a few months where boom, damn, damn, and after all that gain you lose all the profit you because you weren't able to manage the stop loss, the loss,
because the loss is so big at those position sizes, you haven't strategy for increasing your position size, you only increased it because you felt good and because you were winning, and to accept the loss, you start lowering your stops, you start losing more, you start
benefit, and it also destroys your self-esteem and self-concept mentally, trust to continue. Therefore, as I said before, the protocols of your life should be based on behavior, not money.  If you increase
the size, from my psychological point of view , you should always have a pre-established order of decision-making. Increase the size on the x day of the month, when x happens and I will increase it by x% because that way it no longer depends on you, it depends on
what happens in the markets.  If your strategy, your system, your way of operating correlates with the market and everything is going well, you will increase the size.  No, it increase in size too?  No, there has to be a downsizing protocol of,
"Okay, so what do I do when things aren't going badly? Well, I calm down a bit more, I favor again, and then I recover it."  This entire protocol should not be improvised.  Don't improvise.  If you improvise and base your decisions
on results, on whether I win or lose to increase or decrease the size, I promise you it will increase or decrease the size, I promise you it will be chaos and very difficult.   The apart from desensitization and
so much and generate a huge account, do not withdraw money.  You don't withdraw money from trading and therefore you never taste the rewards of doing reward yourselves to keep doing things right, because if you're just playing at
trading platform, you're only seeing numbers going up and down.  If you're doing really well and you start to increase your size and there's a moment when you go from 10,000 to 100,000, you have generated that money, but you haven't touched it.  And if you haven't touched it, it's
fake money.  Until it's in your bank account, or you spend it on dinner with your wife or husband, or you buy, I don't know, a motorcycle, whatever, until you put that money into something tangible, something you see that really makes
sense, you don't connect the fact that your activity is professional, that it's real work, and therefore it will make it harder for you to move up a size because there comes a point when, since you only see numbers going up and down, you're not thinking about
when you manage to move up a size. correctly, and therefore you lose respect for money.  Losing respect for money is as dangerous as having too much respect for it. A balance must be struck between, "Hey, I
tool and at the same time I have to understand that there is a risk of loss, because the risk of loss implies that if I do things wrong and don't increase the correctly and simply increase the size, I might lose that
earn."  Since these are virtual fictitious numbers that I've been tapping keys on and winning, I'm not really thinking about what I'm losing in real life from that. Therefore, it is important to receive rewards
Therefore, it is important to receive rewards to continue motivating yourself and reinforcing your good behavior.  I get something, I've increased the size correctly, I've done things right, I withdraw some of the money and also
growing it, but I take out some money to pay for a treat, to that this makes sense.  That will help you understand that when you increase your professionally, because if you want to keep your money protected, you have to do it in a
your money protected, you have to do it in a formal way and without falling into irrationalities, as we said before.  And other examples of some, let's say see here, are the rules of reversibility, that is, the more
think this is easy, right? Therefore, don't increase the size at the first sign of trouble.  In other words, when you have a good month, don't go up a size because one month doesn't quarter, a little more time to expose yourself more often, to see
how your account goes up and down more often and get used to it.  So, regarding personally advise many people that if you find it difficult to increase the and a mirror account with very little capital, very little risk, or even a
demo account to exchange them. So you, for example, here you operate with your size, the small one, the one that is so hard for you to increase, and here you do the same thing that you would do here you do increase it more to see what happens.  So, there comes a point when
had done what I did in my virtual account here in terms of risk, You've done the same thing, but here the size has increased and here it hasn't. You'll see the will help you gradually transfer these days of size increases
? The mirror account. Another important aid is to always think about the worst-case scenario. That is, when you make the risk relatable, for example, saying, "Wow, if I increase the size too quickly and
end up losing $3,000, although as we said before, these are just numbers, that $3,000 we said before, these are just numbers, that $3,000 is, I don't know, 5 months or 3 months of apply that and start doing calculations for everyday life to
help you understand that you have to respect money and size increases, it's easier than not.  You make mistakes because , as I was saying, you're linking the number you're seeing in your account, in your NLP, with everyday life and
said, reducing the emotional impact is more basic idea of ​​the difficulty involved in increasing your position size and what awareness protocols exist, protocols, everything we've talked about
to try and mitigate those feelings. So, that's all for this video, this kind of position size increase. As you can see, it's very specific, it's a trading; that is, there are many layers, and within those layers, position size is one of the
most important in terms of risk management. Honestly, I'm explaining this because I know many of you are at that threshold where you're starting to make money, but you find it difficult to increase your position size, and if you don't
increase your position size enough, you'll never  You can earn everything Believe me, the traders I know who have earned the most money aren't necessarily the ones with the . They're the ones who have been able to develop a
robust, well-executed sizing protocol that has helped them maximize their strategy's potential. If you have a winning strategy, even a low- sizing increases, you can potentially earn a huge amount of money. So
barriers and overcome obstacles. If you have any questions about email me, as you can see here on the screen, or we can even discuss it in the comments you have any difficulties with sizing, what you think about
position size in general, and whether you believe it's that important. I think it's an so please do. And that's about it, traders. I hope you enjoyed the lesson. If so profit! That way I'll be encouraged to keep making this kind of
more technical content, not so much in a YouTuber style, but more like a straight-up because I think the topics are interesting, so I'd appreciate your support. See you in the next video!