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Results for tag "Risk Management"

Four Effective Ways to Determine Your Ideal Position Size

One of the concepts I’m often asked about by other traders is the concept of proper position sizing. I’ve blogged about this in the past, but that post still left a lot of questions unanswered, especially if you’re in that “experimental” phase of your trading career where you’re trying to feel out what works and what doesn’t. It can be difficult, even after reading that post, to “know yourself” without years of experience. To combat this phenomenon I decided to make the issue of position sizing a bit more systematic. By doing this it gives you a way to …

Effective Position Sizing

Among the many mysteries you’ll encounter as you progress through your trading career, the mystery of effective position sizing will undoubtedly be one of the biggest and most confusing. The mystery seems simple enough to solve, right? Since the solution is really just the answer to the simple question, “How many shares should I trade?” it should be a piece of cake to figure it out. It’s not as simple as you might think though, and here’s why:

When traders, especially new traders, question what size position they should take, most often they are only questioning when a …