Alan Solarsh discusses how trader psychology limits the ability to increase lot sizes as account profits grow — warning that compound growth requires larger lot sizes but a trader's mindset may not be ready, using the analogy of giving a Ferrari to an inexperienced driver.
Your feelings is very important because when you're making 18 profit per month, your mindset is not geared for your lot sizes to increase on a live account the same rate as your percentage profits. So if you're looking at your the compound interest calculator, you're starting on a hundred dollars. And what happens is, is that as your profit goes up, your lot sizes have to go up. As your profit increases, your lot size has to increase. But your psychology is not at that level yet. You can't give a Ferrari to an 18 year old. They're gonna crash it. You're in the same position. You can't use huge lot sizes where you don't understand what those lot sizes are and the repercussions of that lot size.
Sam.
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