I originally posted this here in the performance section – Just ONE open position? But I realize now that this section is better for the topic.
I am the signal provider for the 1x20 SafetyTrade system where I use just 1 position and a tight 20 pip stop. https://www.zulutrade.co.uk/trader/395384/trading
As a Trader, I have long debated the merits of trading with just one open position vs. many positions. Out of about 10,000 systems on ZuluTrade, it seems that a large percentage of them open many positions at once. While the profits can be incredible with many positions at once, it can create a very dangerous situation in case of market reversal.
My goal is to find the perfect “sweet spot” between risk and reward, draw down and profits, and create the perfect system for followers.
Here is my list of pros and cons. What are YOUR thoughts?
Pros of ONE position:
Total pip draw down should be less because draw downs are not multiplied.
If the market changes direction then the trader can make the transition faster
There are fewer trades to manage, so less chance of an attention or technical error
Small accounts can follow a trader with low margin requirements
Better entries because the trader is more focused
No chance for trade-stacking (Martingale) blowouts when the market goes against you
Less chance of a FIFO violation
It is easier for followers to scale their mirrored trades appropriately
Cons of ONE position:
Loss of opportunity. Can’t take another promising trade without closing out the first position
Related to this, with a high-probability move I can’t “load up” for extra firepower.
Multiple positions on the same or correlated pairs allow for better average entry prices
I can’t scale out and leave a runner on and may miss big market moves
“Boring” action with only one
What are YOUR thoughts?