Every trader who's ever calculated their risk correctly on day one has, at some point, kept using that same number for months without ever running it again.
Not because they got lazy.
Not because they got reckless.
Not because they broke a single rule.
They never recalculated the one number, built to go stale the moment the account stopped being the size it was when that number was set.
It's not the stop. It's not the entry. It's not even the size of the loss that started it.
Funded-account evaluators have a phrase for what this number turns into after a rough stretch. They call it the number that never got the memo.
It shows up on accounts that never once broke their own risk rule, on paper, and it has a specific, calculable way of turning a completely ordinary loss into the one that ends the account.
Once you see exactly what that number does over a losing stretch, plotted out trade by trade against an actual drawdown floor, "I always risk the same amount" stops sounding like discipline and starts sounding like something worth checking.
The traders who've caught this in their own numbers didn't catch it by feel. They caught it by running the exact math laid out below, against two hypothetical accounts and a 20,000-account simulation.
A Trading Habits Report
The Frozen Size
What happens when the risk figure never gets recalculated, and the account does.
- Length 20 pages, with 8 original charts and two worked hypothetical case studies
- Author TradingHabits.com
- Format PDF, delivered as an instant download right after checkout
- Covers The exact arithmetic behind risk-per-trade drift, the 1956 Kelly formula and Ralph Vince's fixed-fractional research, two worked case studies against an actual drawdown floor, and a 20,000-account simulation comparing frozen sizing against sizing that rescales
This report breaks down the research, the math, and the numbers on one specific decision.
What's Inside
20 Things This Report Actually Says
- 01The exact division problem that turns a properly-calculated 1.50% risk into 1.68% without a single new trade decision.Page 5
- 02Why a $10,000 account and an $8,950 account can be risking the "same" dollar figure and be taking two different bets entirely.Page 5
- 03The one-sentence habit that separates a risk figure that stays honest from one that goes stale unnoticed.Page 3
- 04The specific reason recalculating position size loses the competition for a trader's attention almost every single time.Page 4
- 05Why lowering size after a loss can feel like admitting something a trader isn't ready to admit, and what that has to do with a number on a spreadsheet.Page 4
- 06The single event that never happens when a risk figure drifts, and why that's exactly what makes it dangerous.Page 4
- 07Side-by-side, eight losing trades run through two different sizing rules, and only one of them stays flat.Page 6
- 08The 1956 formula that started the entire argument for sizing risk as a fraction of current capital, decades before retail trading existed.Page 7
- 09What a well-known trading author's thought experiment about a "strong system" and a "mediocre system" actually proves about position sizing.Page 7
- 10The mathematical property that lets one sizing method approach zero and never technically reach it, while the other hits it on a fixed schedule.Page 8
- 11A $10,000 account, seven losing trades, and the exact percentage the next trade is actually risking without anyone changing a number.Page 9
- 12The specific dollar figure a "normal, unremarkable drawdown" leaves standing between a funded account and its floor.Page 11
- 13Why a trader who never once broke their own 1% rule can still fail a funded account on a single, ordinary-sized loss.Page 12
- 14The exact percentage of a remaining cushion that one single fixed-size trade turns out to represent, once the math is run.Page 12
- 15What 20,000 simulated accounts, an identical edge, and one different sizing rule actually produce after 150 trades.Page 14
- 16The specific trading condition where a frozen risk figure stops being an accident and starts being a measurable disadvantage.Page 15
- 17How much more often an account touches its own drawdown floor during a rough stretch, once the risk figure stays frozen instead of shrinking with it.Page 15
- 18The other half of the same habit: it caps growth after a winning stretch instead of causing a loss.Page 16
- 19The top 25% of simulated accounts, and the specific percentage difference between the ones that rescaled their size and the ones that didn't.Page 16
- 20Four sentences traders say right before this exact mistake, and the specific math in this report that answers each one directly.Page 19
HABITS
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Behind The Report
Fixed-Fractional Sizing And The Kelly Criterion
The same position size, trade after trade, even as the account it's measured against keeps changing shape.
The Concept
Risking a fixed dollar amount per trade sounds disciplined, until the account balance moves and that fixed number stops matching it. The same $150 risk is a bigger percentage of a $4,000 account than it was of a $5,000 one, growing automatically during a drawdown with no single decision behind it.
Fixed-fractional sizing, recalculating risk as a percentage of current equity after every trade, is the fix. It's a different math problem, not a bigger effort.
Where It Comes From
The underlying math traces back to John Kelly Jr., a scientist at Bell Labs who published "A New Interpretation of Information Rate" in the Bell System Technical Journal in 1956, solving a problem about telephone signal noise, not gambling or trading. Gamblers and later traders, most famously Ed Thorp, adapted what's now called the Kelly Criterion for bet sizing.
Ralph Vince translated the concept for traders specifically in his 1990 book Portfolio Management Formulas, coining the term "fixed fractional" position sizing that's now standard vocabulary in risk management. Van Tharp's published position-sizing research built on the same foundation. The finding across all of it holds up: how much you risk per trade shapes long-run results at least as much as which trades you pick.
A Frozen $150 Risk, As The Account Drops
Same $150 risk, five account balances, no one touched the sizing rule between any of them. The percentage climbs on its own, purely because the denominator got smaller. A trader still "risking $150 like always" is risking more of what's left with every step down.
Try It: Drag Your Own Account Down And Watch The Percentage Move
Same math as the chart above, with your own numbers. Enter what you actually risk per trade, then drag the account size down and watch the percentage climb even though the dollar amount you typed in never moves.
Background only. The report itself works two account case studies and a 20,000-trial simulation comparing frozen sizing against sizing that rescales.
Common Questions
Is fixed-fractional sizing the same thing as the Kelly Criterion?
Not quite. Kelly's 1956 formula calculates an exact bet fraction from a known edge and payout ratio. Fixed-fractional sizing, the term Ralph Vince coined in 1990, is the simpler cousin: risk a percentage of current equity instead of a flat dollar amount, no edge calculation required. Same family of math. Different level of precision.
How often does the risk number actually need recalculating?
After every closed trade. Not weekly, not "whenever it feels off." The account balance is different the second a trade closes, and a risk figure built on yesterday's balance is already stale.
Does this only matter on funded accounts?
It shows up hardest there, since most funded programs run a fixed drawdown floor. But the same drift happens on a personal $5,000 account too. The report runs both, plus a 20,000-account simulation comparing the two approaches.
What's the actual cost of recalculating every trade?
More arithmetic. That's it. A spreadsheet or a calculator handles it in seconds, which is most of the argument for building the habit in the first place.