When deciding to place an order, how does he determine the position size? Is it based on a fixed percentage of capital, or on the certainty of the trade?

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The question about how Kosho Kawachi (BNF) decides his position size is something many newcomers to trading are particularly curious about. How does he achieve such almost mythical trading feats with positions varying so dramatically in size?

Actually, I can tell you very clearly: he absolutely does NOT base it on a fixed percentage of his capital. Instead, it's entirely based on his judgment of the "certainty" of that particular trade.

Let me give you an analogy to make it easier to understand.

Imagine you're playing Texas Hold'em poker:

Fixed percentage risk: This is like betting 5% of your total chips every hand, no matter what cards you hold. Even if you have the nuts (like a royal flush), you only bet 5%. If you have a terrible hand, you still bet 5%. That sounds unreasonable, right? While this approach might keep you in the game longer, it will never allow you to win big money.
Based on certainty: This is how the pros play. If you have an average hand, you might just call or place a very small bet to test the waters. But when you have a near-certain winning hand and judge that opponents are likely to call, you place a large bet, or even go all-in, aiming to maximize your profit in that specific hand.

BNF's trading follows this latter, pro-style approach. His position sizing serves his trading strategy completely.

Breaking Down His Approach

1. Core Idea: Bigger the Opportunity, Bigger the Position

BNF's trading logic isn't "how much can I afford to lose on this trade?" but rather "what is the probability of winning on this trade?"

High Certainty Opportunity = Heavy/Full Position: When he identifies an opportunity he considers "in the bag," he doesn't hesitate to commit enormous amounts of capital. His most famous "counter-trend fade of the bias rate" strategy is a classic example. When he sees a stock irrationally plunge sharply in the short term, deviating far from its normal moving averages, he judges this like an overstretched rubber band where a rebound is highly probable. In his view, this is a "high certainty" opportunity, so he dares to invest billions or even tens of billions of yen to capture the rebound.
Uncertain Opportunity = Light Position/Wait: If the market trend is ambiguous, or if a stock's pattern doesn't match one of his high-confidence setups, he might only deploy a small amount of capital to "test it out," or simply abstain and continue waiting for the perfect timing.

2. What Exactly is "Certainty" in Trading?

This is probably the most crucial and hardest aspect to learn. His judgment of "certainty" primarily stems from the following:

Deep Familiarity with Technical Patterns: He has an ingrained understanding of his trading system (e.g., bias rates, key support levels). He knows what market sentiment lies behind specific chart patterns and the probability of a reversal. It's like an experienced hunter who, seeing the footprints and posture of prey, knows exactly where it will run next.
Overall Market Sentiment: He assesses whether it's a bull or bear market and the prevailing mood of the market—panic or greed. In an extremely fearful market, many stocks get oversold ("mis-killed"), increasing the "certainty" of his bottom-fishing.
Observing Money Flow: He closely watches the order book, tracking large buy and sell orders to gauge the intentions of major players. If, at his identified entry point for a reversal, a continuous stream of large buy orders appears, it further validates his analysis and increases "certainty."

3. Why Doesn't He Use Fixed Fractional Position Sizing?

Fixed fractional position sizing, like the famous "2% rule" (where the loss on any single trade is limited to 2% of total capital), is a risk management tool. It's particularly suitable for beginners and systematic traders. Its core purpose is "survival."

However, for a top-tier scalper like BNF, risk management is already built into his selection of trading opportunities. He controls risk not by limiting losses per trade, but by only placing heavy bets when the odds of winning are exceptionally high.

If he used fixed fractional sizing, he would be severely limiting his profit potential with positions that are too small during those rare, exceptional opportunities, contradicting his goal of "profit maximization."

To Summarize

Simply put, BNF's position sizing can be summed up in one sentence: He doesn't take the shot unless it's highly likely to be a decisive, powerful sniper strike.

His position size is dynamic and flexible, entirely determined by his confidence in how much money he can make from the current opportunity.
He isn't a trader who restricts himself with fixed rules; he's a "hunter" making decisions based on his extreme understanding of the market and reading the tape (market intuition).

A final word of caution: This approach is built on exceptionally high personal skill and psychological stability. For ordinary people, without his level of judgment, blindly imitating heavy or full position sizing often leads to disastrous results. For us, learning sound risk management with principles like position sizing limits, preserving capital, and focusing on "survival" are more realistic and critical initial goals.