The hot hand after wins and the overconfident size increase
Posted: Sat Oct 31, 2026 8:08 pm
Losses get all the attention when discussing discipline. Winning streaks cause just as much damage.
After several wins, confidence rises. Position size creeps up, filters loosen and trades that wouldn't have qualified earlier get taken. Then a normal losing run arrives, bigger than usual because of the larger size, and the gains from the streak disappear.
Variance in scalping is high, and streaks happen by chance. A run of ten wins doesn't mean the market has changed or skill has jumped. It often means conditions suited the strategy for a while.
A rule that fixes size regardless of recent results helps. So does a review of whether winning trades followed the criteria or involved some creative interpretation.
Some traders also set a profit target for the day, and stop after reaching it, though others find this cuts good days short. Either way, the point is to avoid letting a streak change behaviour.
Do you keep position size constant through hot and cold streaks?
After several wins, confidence rises. Position size creeps up, filters loosen and trades that wouldn't have qualified earlier get taken. Then a normal losing run arrives, bigger than usual because of the larger size, and the gains from the streak disappear.
Variance in scalping is high, and streaks happen by chance. A run of ten wins doesn't mean the market has changed or skill has jumped. It often means conditions suited the strategy for a while.
A rule that fixes size regardless of recent results helps. So does a review of whether winning trades followed the criteria or involved some creative interpretation.
Some traders also set a profit target for the day, and stop after reaching it, though others find this cuts good days short. Either way, the point is to avoid letting a streak change behaviour.
Do you keep position size constant through hot and cold streaks?