Scaling out at logical algorithmic levels protects capital, reduces opportunity cost, and aligns with the market's natural liquidity cycles. Partial exits are a core component of ICT's risk-management philosophy.
Nang challenges the conventional stop-loss mindset, arguing that if fundamentals haven't changed, adding to a losing position can be optimal. He also explains why many quant firms avoid hard stops altogether.
Nang discusses how to size positions, the importance of monitoring edge decay, and why a disciplined approach to loss streaks is vital.
Position size must reflect setup quality and personal temperament. The system's profitability is the ultimate gatekeeper; confidence cannot compensate for a weak edge.
Hiren uses a fixed‑fraction risk model (1 % of account per trade) and places stop‑losses at the previous day low, which historically is rarely breached by winners. He adjusts position size based on stop‑loss width, keeping risk constant while varying exposure.