Working with a guy who just started risking 5% per trade instead of his usual 1-2%. No heads up or discussion about it.
Seems like he’s chasing losses from last week. How do you handle this situation when you’re managing the relationship?
Set clear risk limits from the start. Hold them steady. This video on trading psychology can help you understand better.
It’s tough to change habits during winning or losing streaks.
Been there with several traders. That 1-2% to 5% jump screams revenge trading.
I have one direct conversation about it. I tell them what I see and that risk needs to drop back to agreed levels. They usually know they’re doing it but need someone to call it out.
If they don’t listen, I’m out. Wasted too many sleepless nights trying to save traders from themselves in my early days.
Traders chasing losses don’t stop at 5%. Next week it’s 10% or worse. Better to bail before things get ugly.
Cut ties now before they drag you down too.
Talk to them immediately about what changed. Most traders doing this already know something’s wrong but won’t admit it.
I ask what made them change their position sizing. Sometimes there’s a real reason that isn’t just emotional trading.
If it’s revenge trading, decide quickly - can they get back on track or are they about to blow up their account?
Cut them off immediately. Don’t negotiate or give warnings. Just tell them you’re done until they fix their position sizing. They need to get back to 1-2% risk per trade and stick to it for two weeks minimum. No exceptions. When traders jump from 2% to 5%, they’ll hit 10% next. I’ve watched this pattern blow up accounts fast. Your reputation takes a hit when you’re tied to blown accounts. They can come back once they prove they’ve got control again.