Position sizing is one of the components of a trading plan, and it's important to be just as disciplined and consistent with this as with all other parts of the plan. Position sizing is defining how much we will risk for each and our objective is to consistently get the most profit with the least amount of risk.
So, how much should you risk per trade? There is...
Trading forex? Stop gambling with your capital! This video exposes the massive mistake new traders make - using inconsistent lot sizes. It's a recipe for disaster, blowing accounts and crushing dreams.
But there's good news. Discover the secret weapon of successful traders: consistent lot sizing.
In this actionable video, you'll learn:
Why fluctuating lot sizes...
What is position sizing & why is it important?
Position size refers to the amount of risk - money, contracts, equity, etc. - that a trader uses when entering a position on the financial market.
We assume, for ease, that traders expect a 100% profit or loss as a result of the profit lost.
Common ways to size positions are:
Using a set amount of capital...
Example:
The account size is $4500.
We risk 2%, 90 cash, for this 2R trade.
If the trade idea is a success
we would now have 4678 cash in our account
a profit of: 178 cash
And if loss, a total of 4410 cash, 90 cash loss)
Is this correct?
Explanation:
The example seems correct but only without the fees in calculation.
Even small fees like e.g. 0.04% Taker...
To build your strategy ,there are many factors that represent the columns of the building .
These factors named by me the concepts of building the strategy.These include:
1-trading psychology
2-risk management
3-position sizing
4-trading plan
These are the main factors .
There is also an auxillary factors i will mention it later on
Position sizing is the process of determining the size of a trade or the number of units of security that are bought or sold. There are several different types of position sizing that traders can use, depending on their risk tolerance and trading objectives. Here are a few examples:
1. Fixed fractional position sizing: This is a simple method of position sizing...
Position sizing is determining the correct size of the position based on the amount of money you risk on the particular trade.
Before you can do that, you need to figure out what is the maximum acceptable risk of the trade.
That risk is usually expressed as a % of your balance, that you are willing to lose.
To make sure you don’t lose more than this amount...
Many traders have 2 or more trade set ups.
It is important to know the following:
1)The risk of your trade must be in accordance with the winning percentage of the trade set up.
1)Your share size should increase or decrease in accordance with the winning percentage of the trade set up.
* Share size increase must be in accordance to you account size (account...
Position Sizing
Traders spend much of their time looking at charts and analyzing using technical or fundamental analysis, or a combination of both. While this indeed is a very good thing to spend time on, not all traders take their time to focus on risk management, and more specific position sizing. I see a lot of new traders or old traders which trade only to...
Try to find where your current stress level is on the diagram.
If you are a trader and already have taken position , how much is your position size % ? Do you think there is a correlation between your stress level and your current position size , then subsequently your performance ?
If you are in red level, now is a good time to seek some serious change. Trading...
When you should use leverage in your trades? I’m going to answer this question, but first, we have to mention two other questions to be answered.
Q1: What is a reasonable trade?
An order in which the entry point, stop loss, and take profit are already pre-defined based on a good return strategy or rules.
Q2: What is money management?
Money management is to...
Hey Guys!
Do you find your self increasing and decreasing the lot sizes you trade depending on your trade set up? Or perhaps even doubling down after a previous losing trade? I know I use to! For a number of reasons! The most common being "making up for previous losses". Now I don't completely disagree with different position sizes depending on the trade set up....
Hi!
Most commonly used and popularized position sizing method is percent equity model i.e. trader should never risk more than certain percent of trading
capital on a single trade. Quite often this number is 2%. This can be anything - within trading there is no right or wrong answers. It all depends
from different factors:
*Goals
*Risk tolerance
*Account size...
In this video I go over 3 different position sizing methods you can use to work out how many shares to buy.
Risk management is often overlooked but it's very important to keep a consistent level of risk across all of your trades so that one trade can't blow your account up and you can remove the emotion from your trading when deciding how many shares to buy...
The Kelly Criterion is a formula that calculates the optimal bet size based on known probabilities that maximizes gains while minimizing ruin... or not getting “rekt” .
When we read social media and see infographics of "if you had just invested all your money into THIS you'd have THAT MUCH" it is tempting to dream about how rich we could be just betting BIG ....
Stop gambling! I see this all of the time, too many new traders using max leverage on every single trade. Do you want to see steady growth in your account? Then stop here and let this really sink in, use the same amount of risk on every trade. For example, if your risk is 2% of your account size per trade then make sure no matter where your entry is your...
CAUTION : EXPERIMENTAL
Hello friends.
Whale trading system has been developed and placed on a more reasonable ground.
So this publication is an improved version of the educational idea : How do "Whales" Trade?
Before Starting
In related ideas, you can see the first version and the script I used to create this idea.
And there is an intermediate version...
