Sizing amplifies edge — it doesn’t create it
Compounding a real edge is how small accounts grow; compounding a negative edge is how they blow up. This tool shows both curves side by side from your own numbers. Find your optimal risk fraction on the Kelly criterion calculator.
Percent sizing or fixed dollars: the real difference
Flat sizing risks the same dollars every trade; percent sizing risks the same share of a moving account. Same win rate, same strategy — different account curves. Percent sizing compounds gains and self-throttles in drawdowns (risking 1% of a shrinking account shrinks the bets); flat sizing grows linearly and hits drawdowns at full nominal weight.
The numbers over 100 trades at +0.3R expectancy, 1% risk: percent sizing lands near +34% with drawdowns softened by the automatic de-risking; flat sizing yields +30% with every loss hurting the same regardless of account state. The gap widens with time and expectancy — compounding is exponential, flat is arithmetic.
Why anyone chooses flat anyway: psychological stability (each trade means the same dollars, no creeping stake anxiety) and immunity to the "compounding into a losing streak" pattern, where percent sizing after a hot run risks the largest-ever dollar amounts exactly as the edge cools. Serious operations often blend: percent sizing, rebased monthly rather than per-trade.