L5.2 — Scaling Up: When and How to Increase Risk Parameters

Scaling up means increasing either the risk percentage, the account size under management, or both. Each requires a specific prerequisite. Increasing risk percentage from 0.5% to 1% requires: at least 50 trades at the lower setting with documented positive expectancy, no current drawdown above 5%, and a written review confirming the edge is stable. Doubling risk percentage without these prerequisites doubles both growth and loss potential on an unproven edge.

Adding external capital (from others) requires a different threshold entirely: a minimum 6-month live track record, detailed performance data, and a clear understanding of the legal and compliance requirements for managing others' funds. This course does not cover managed accounts or investment services — this note is a guardrail, not a path forward.

The rule of thumb: every time you double your risk percentage, you need to requalify your edge at the new level before treating the increase as permanent. What works at 0.5% may feel very different at 2% because the emotional stakes are four times higher. The edge may be the same; your execution under increased pressure may not be.