Vicious Cycle Stage · Stage 3 of 10
Larger / Riskier Position — Definition, Examples, How to Fix
Position size or strike selection becomes aggressive — the trader takes on materially more risk than their plan allows.
What it is
Following overconfidence, the trader actually deploys the larger size: 2x lots, deeper out-of-the-money options, looser stop-loss, or a leveraged perpetual at 5x instead of the usual 2x. The trade may still work — but the asymmetry has flipped. A small adverse move now hurts disproportionately, and the emotional response to that pain triggers the next stages.
What it looks like
- Buying 200 lots of NIFTY when usual size is 50 lots, "because the setup is so clear."
- Selecting a deeply OTM weekly option for cheaper premium when the plan said ATM only.
- Doubling leverage on a crypto perp from 3x to 10x mid-session.
Why it costs you money
When this trade hits the stop-loss, the loss is 2-4x the planned risk. One such trade can erase 5-10 disciplined wins. This is the single highest-leverage point in the cycle to break.
How TradeSaath detects this
Position-size variance against the trader's 30-day median, leverage multiplier deviation, and strike-distance analysis for options trades — TradeSaath surfaces the trades where these metrics exceed personal norms.
How to fix it
- Set a hard daily maximum position size — no exceptions.
- Use a fixed percentage of account equity per trade (0.25%-1%) computed before market open.
- For options: pre-define the maximum strike distance allowed in your plan.
- For crypto/forex: cap leverage at the level you can hold through a 5% adverse move without panic.
Related
Is larger / riskier position costing you money?
Upload your trade history and find out — first analysis is free.
Analyse my trades →