Because you went short 5 lots, your 'markets money' space should be 25% larger ---> (5/4) * GainedSpace.
So what you're actually saying there, in plain English, so that anyone can understand
Is that the first box he's drawn should have extended between the top where he's put it and the bottom 4 lot position - i.e. all the space.
He's entered at a better price, the 5 lot position so gained space is 5/4 i.e. he's gained 25% more than if he'd entered at the 4 lot position.
Guys, it's really simple. It's just, in effect a reverse R:R accumulator, hehe. It's bound to have a high win rate because you're not trying to get more space in one move than you're risking. Is price more likely to move 20 pips in time N or 300 pips?
There's 2 things I struggle with understanding: the 'get out' or shed lots line. Having a line in the sand and liquidating I'm fine with. Shedding lots however, yes I understand that you move your position further away (swap lots for space) but then if you're just going to hold on price has to move much further in your favour to get back to a break even situation. It's no different to seeing a 50% reduction in your account and having to gain 100% to get to b/e in that situation.
Fixed fractional does the same thing i.e. when you lose some % you reduce your stake which means it's harder to get back to where you were.
What I've always done (and it definitely works in testing, it's other things I have problems with, like getting direction right!) is once at a certain size, keep using that size irrespective of if you've just had 1 or 2 losing trades. It's not Martingale but it's heading that way.
There's also one other thing that's always bugged me in the original space thread and it's this: 3/0 does not = 0. Anything divided by zero = infinity. But I think this is some kind of notation, not just maths.
Oh dear: too much coffee again