How many positions should you execute per week?
The trade quantity question is a broad topic and has many sub categories, however I will break down two aspects that traders should consider prior to identifying their average trade quantity.
Firstly, you must identify whether or not your style is swing trading or day trading, of course day trading will provide more opportunities given the intraday movements.
Both styles are profitable but will depend on your lifestyle and time availability.
The second component is identifying whether your a conservative, moderate or aggressive trader, all of which have their drawbacks.
A conservative trader ( My personal style ) execute between 1 and 3 positions per week, scouring the portfolio looking for textbook trade opportunities that have the highest probability of success.
By opening less trades at a higher strike rate will reduce drawdown and increase profits.
A moderate trader will execute between 4 and 8 positions per week opening positions that are a little more discretionary and not waiting for the perfect setups.
The aggressive trader will execute 8 to 15+ positions per week, although the trade quantity is very high it doesn’t mean they can’t be profitable, however it’s likely they have a slight edge over the market (55% / 60%) and requires high volume of trades to generate healthy returns.
All three categories above have there up and downside, you should choose based on your daily commitments, trading style and backtesting data.
Which type of trader are you?
Conservative, Moderate, Aggressive.
The trade quantity question is a broad topic and has many sub categories, however I will break down two aspects that traders should consider prior to identifying their average trade quantity.
Firstly, you must identify whether or not your style is swing trading or day trading, of course day trading will provide more opportunities given the intraday movements.
Both styles are profitable but will depend on your lifestyle and time availability.
The second component is identifying whether your a conservative, moderate or aggressive trader, all of which have their drawbacks.
A conservative trader ( My personal style ) execute between 1 and 3 positions per week, scouring the portfolio looking for textbook trade opportunities that have the highest probability of success.
By opening less trades at a higher strike rate will reduce drawdown and increase profits.
A moderate trader will execute between 4 and 8 positions per week opening positions that are a little more discretionary and not waiting for the perfect setups.
The aggressive trader will execute 8 to 15+ positions per week, although the trade quantity is very high it doesn’t mean they can’t be profitable, however it’s likely they have a slight edge over the market (55% / 60%) and requires high volume of trades to generate healthy returns.
All three categories above have there up and downside, you should choose based on your daily commitments, trading style and backtesting data.
Which type of trader are you?
Conservative, Moderate, Aggressive.