Trade like a poker player
While the mechanics above are new, as a poker player you already know what to do with them. Everything that follows is probably a habit you already have, just applied to a different game.
Sizing positions against a bankroll
You already know not to sit down with your whole bankroll. A cautious player wants 100+ buy-ins for the cash game or tournament they're about to enter; a more aggressive one might be comfortable with 50. The number varies with risk tolerance, but the principle doesn't: no single session should threaten your ability to keep playing.
Decide what a single position can cost you: A trader risking 1% of a $10,000 portfolio has $100 at stake on any one trade. That's the equivalent of choosing a stake level relative to your roll.
Work backwards to the position size: If you'd close the trade after a 10% adverse move, then $100 of risk means a $1,000 position. The exit level and the risk you'll accept together determine the size.
Count leverage as part of the exposure: A $1,000 position at 5x leverage is $5,000 of exposure. That larger figure is the one to size against.
The mistake looks familiar. A player who moves up stakes after a losing night has abandoned bankroll management, and so has a trader who doubles their position size to make back yesterday's loss.
Set an exit before you enter
Position sizing only works if you know where you'll get out, which means deciding before you open the trade. Two order types do this for you.
A stop loss closes your position automatically if the price falls to a level you set. A take profit closes it automatically if the price rises to a level you set. Both are placed when you open the trade.
Set the stop loss when you open the position: Deciding in advance means deciding while you're calm.
Place it where the trade idea is invalidated: If a price move to $140 means your reasoning was mistaken, the stop loss belongs at $140, whatever the dollar figure attached to it.
Set a take profit as well: Decide what the trade is worth if it works, and let the order close it there. A winning position with no exit plan is one you'll close on instinct, either too early out of nerves or too late out of greed.
Time horizon and variance
Variance matters less over a longer sample. One 200-hand session tells you very little; 50,000 hands offers a better signal. A strong player with a small edge can lose for months and still be a winner over the years.
Markets behave the same way. A price that swings 15% in a week may be up 100% over a year, and the trader holding across that period is exposed to far less noise than trading it hour by hour or day by day.
Your edge is also harder to measure here. In poker you can watch the table and see who's playing badly. In a market you can't see the other players at all. Trading over longer horizons reduces how much that matters, because your result depends less on out-trading anyone and more on whether your read on the asset was right.
Fewer decisions means fewer chances for a bad one: A longer holding period cuts your exposure to short-term noise.
Short-term trading is a tougher game: The faster you trade, the more you're up against firms with better data, better speed and full-time focus. That's a reason to be honest about your edge before you size up.
Take shots deliberately: Treat a shorter-horizon trade the way you'd treat a shot at a bigger game: a small, fixed portion of the roll, decided in advance, with a clear point at which you go back down.
Discipline over emotion
Chasing losses: Opening a new position immediately after a bad one, sized larger, to get back to even. The market doesn't know you're down and doesn't owe you a recovery.
Refusing to close a loser: You wouldn't commit more chips to a pot you know you're losing. Don't hold a losing trade because you don't want to realize the loss.