Another factor can be how confident you are with a trade.
If you feel the probability of a win is not the highest, but still you want to take the trade because the setup appears sound, you might choose not to go “all-in” with the usual 1%, but go for 0.5% instead.
Also, in case you want to take in general a more conservative and careful approach, then going for 0.5% is perfectly fine.
But there is also an exception on the other extreme: At times, there are unique trading opportunities with literally a 99% chance of success.
Examples are the Brexit decision with a clear short of speedposts the British Pound (GBP) or the Trump US election followed by a clear short of the Mexican Peso (MXN).
These are the kind of opportunities where you can make huge amounts of profit and where you may hence decide to get in bigger with 2% or even 5%, in case your trading account is large enough to survive possible and sudden short-term spikes in the other direction, since such events create insane volatility.
Often not understood by many, proper position damascuscollections sizing is one of the key elements of successful trading.
Almost nothing matters more than how many money units you trade because it determines, along with the other factors, your chance of maximizing your profits on one hand and to minimize drawdowns on the other.
There are various position sizing models out there, most notably laid out in the book “Definitive Guide To Position Sizing” of Van Tharp, which we strongly recommend to study, in order to get the whole picture on the topic.
Above all, keep always in mind that the most important thing to do as a trader is to protect what you already have, because once you lose your initial trading capital, you are out of the game.
Therefore, proper risk management is key.