Position sizing should be locked in when you design your trading system, not decided on the fly based on emotions or market moves. Predetermined rules for maximum exposure, volatility scaling, and risk allocation across positions prevent inconsistent risk that kills otherwise solid strategies.
Position sizing isn't something that should be decided in the moment, and it isn't something that should be changed based on how confident or how uncomfortable someone feels. When sizing decisions are made reactively, risk becomes completely inconsistent, and inconsistency is what eventually breaks good trading strategies. So in a properly engineered system, position sizing is designed in advance, during the setup phase, as part of the system's architecture itself and before any capital is deployed. All the rules have to be completely defined how much exposure the system can take, how that exposure changes as volatility expands or contracts, and how risk is distributed across positions. These are all specified ahead of time. Nothing is left to interpretation Once the system is live, and this is part of the architecture.
