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The Position Sizing Error Destroying Accounts With Winning Strategies

by | Nov 20, 2025

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I need to share something with you that took me years to learn the hard way — and it might be one of the most important trading lessons I can offer.

It’s not about finding better setups. It’s not about improving your win rate. And it’s not about discovering some secret indicator that changes everything.

The No. 1 reason traders fail — even with winning strategies — comes down to position sizing.

Tom Sosnoff, the founder of Thinkorswim and TastyTrade, has said that among hundreds of thousands if not millions of users, most people who have trouble in their accounts face a trade or position size issue.

That’s not a small sample size — that’s real data from real trading accounts.

The solution? Take control of your trade and position sizes, and it becomes less of an issue.

The Painful Lessons From My Own Account

Let me tell you about my Forex trading days. My best year in Forex was over 100% return, and I was trading just one standard lot on a $50K account. It’s not unbelievable — it’s simply the result of controlled risk.

But I didn’t start there…

I once had a $20K account where I took seven standard lots, and the broker liquidated all my positions for a $3K loss. I didn’t do anything wrong with my analysis or setup — I just took too many trades and over-leveraged my account.

It’s the emotional fallout from those oversized losses that does the real damage. A big loss doesn’t just hit your balance — it hits your confidence. It makes you hesitate on the next setup, second guess trades you would normally take and tighten stops out of fear instead of logic.

One oversized loss can chain react into a whole series of poor decisions because you’re no longer trading your strategy — you’re trading your feelings.

Here’s what I’ve noticed happens with people who follow my live trades: They like the fact that I take trades live because it shows that I have skin in the game too, so they double, triple, quadruple or even 10x the risk.

They win with me and make a ton of money. Then they lose, and suddenly they realize they can’t afford to lose like that.

Once that emotional threshold is crossed, everything becomes harder. Your strategy doesn’t feel trustworthy anymore. The market feels more dangerous. You find yourself chasing wins to make up for losses, or avoiding trades altogether because you don’t want to feel that pain again.

The emotional damage from an oversized loss is devastating — and it changes everything about how you approach the next trade.

How to Avoid Getting Punched in the Mouth

“Everyone has a plan until they get punched in the mouth” — that’s the Mike Tyson quote that perfectly captures trading reality as well as boxing. The key is simple…

Don’t let the punch hurt that badly.

If we’re going to lose — which we are from time to time — let’s take defined risk trades that don’t cost an arm and a leg. If a loss doesn’t hurt you emotionally, then you’re in the right position size.

You’ll survive, you’ll keep trading and you’ll be profitable over time.

Good risk management is not just about protecting capital — it’s about protecting your ability to think clearly. When your losses are manageable, you can stay consistent. You can let your strategy work. You stop reacting and start executing.

The traders who last are the ones who make risk management so routine that it becomes boring.

You can’t question a strategy after taking one loss — especially if that loss was magnified by your position size rather than the strategy itself.

Here’s the truth that nobody wants to hear: If trading is boring, you’re going to be fine. When trading creates emotional swings and highs and lows, it’s always going to be like that, and that’s not how it should be.

Boring trading means proper position sizing. Boring trading means you can take a loss without questioning everything. Boring trading means you survive long enough to let your edge play out.

I don’t want you to experience a margin call. I don’t want you to blow up your account. I’ve been there, and I’m sharing this so you don’t have to learn it the hard way like I did.

Control your position size, and you control your trading future.

I’ll see you in the markets.

Chris Pulver
Chris Pulver Trading 

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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. 

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We develop strategies to the best of our ability, but we cannot guarantee a future return. There is always a risk of loss when trading. Past performance is not indicative of future results. The results shown are from a 237-trade backtest from 1/1/20 – 1/1/26. The result was a 70% win rate, 40% average return (winners and losers), with a 7-day hold time. 

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