Comments on: Position Sizing http://tradermike.net/2005/07/position_sizing/ Stock market commentary & trading ideas. Stock market weblog (blog), swing trading, day trading, stock picks, technical analysis, stock charts, stocks. Mon, 06 Oct 2008 20:15:49 +0000 http://wordpress.org/?v=2.6.2 By: Michael http://tradermike.net/2005/07/position_sizing/#comment-1506 Michael Mon, 10 Oct 2005 02:54:24 +0000 http://www.tradermike.net/2005/07/position_sizing/#comment-1506 You lost me. How can anybody trade without some kind of position sizing? How would you ever decide how much to buy/sell? You lost me. How can anybody trade without some kind of position sizing? How would you ever decide how much to buy/sell?

]]> By: Technicator.NET http://tradermike.net/2005/07/position_sizing/#comment-1505 Technicator.NET Mon, 10 Oct 2005 00:01:41 +0000 http://www.tradermike.net/2005/07/position_sizing/#comment-1505 I've started using position sizing and in the beginning feel a bit reluctant to shell out so much cash and invest it into a stock even though the stop is very tight and the loss risk is calculated into the position size. Position sizing is not magical because it stil requires the identification of where the stop would be and screwing up on this part would lead to a quick defeat (loss of money). So I think position sizing is best suited for the experienced in day trading and definitely helps make money fast. Just like trading with any other strategies, inflate position size when the stock goes your way, and cut loose when it goes against you. This way, you rake in profits when it works and minimize losses when it doesn't. I’ve started using position sizing and in the beginning feel a bit reluctant to shell out so much cash and invest it into a stock even though the stop is very tight and the loss risk is calculated into the position size. Position sizing is not magical because it stil requires the identification of where the stop would be and screwing up on this part would lead to a quick defeat (loss of money). So I think position sizing is best suited for the experienced in day trading and definitely helps make money fast.

Just like trading with any other strategies, inflate position size when the stock goes your way, and cut loose when it goes against you. This way, you rake in profits when it works and minimize losses when it doesn’t.

]]> By: Stuart Barnes http://tradermike.net/2005/07/position_sizing/#comment-1504 Stuart Barnes Wed, 06 Jul 2005 18:15:50 +0000 http://www.tradermike.net/2005/07/position_sizing/#comment-1504 Mike, That section on position sizing that you paraphrase got my attention too. I am now just starting to employ a position sizing algorithm that uses a 10day ATR to determine the degree of volatity in a stock, and a factor of 3 on that to determine my stop. I then calculate the position size based on a 1% equity risk. What has surprised me is that some of my trades have increased in size quite dramatically, while I have decided not to trade others I would normally have, as the position size was so small. It has also made me reduce the number of stocks I am holding. I will let you know how it works out. Keep up the good work. Stuart Mike,

That section on position sizing that you paraphrase got my attention too. I am now just starting to employ a position sizing algorithm that uses a 10day ATR to determine the degree of volatity in a stock, and a factor of 3 on that to determine my stop. I then calculate the position size based on a 1% equity risk.

What has surprised me is that some of my trades have increased in size quite dramatically, while I have decided not to trade others I would normally have, as the position size was so small. It has also made me reduce the number of stocks I am holding.

I will let you know how it works out.

Keep up the good work.

Stuart

]]> By: David Jackson http://tradermike.net/2005/07/position_sizing/#comment-1503 David Jackson Wed, 06 Jul 2005 00:46:31 +0000 http://www.tradermike.net/2005/07/position_sizing/#comment-1503 Mike, This is a terrific post. Very interesting. Mike,
This is a terrific post. Very interesting.

]]> By: carlo_trader http://tradermike.net/2005/07/position_sizing/#comment-1502 carlo_trader Tue, 05 Jul 2005 20:08:24 +0000 http://www.tradermike.net/2005/07/position_sizing/#comment-1502 Among the questions a trader has to answer those of risk management and moneymanagement are the most important. Risk management is about placing an initial stop. This determines the risk in a trade. Moneymanagement is about controlling the size of a trade. With a fixed percentage both questions collide to one question because the initial stop determines your risk and therfore your size. See also <a href="http://radio.weblogs.com/0142482/stories/2004/11/27/DAX-tradingsystem.html" rel="nofollow">http://radio.weblogs.com/0142482/stories/2004/11/27/DAX-tradingsystem.html</a> Among the questions a trader has to answer those of risk management and moneymanagement are the most important. Risk management is about placing an initial stop. This determines the risk in a trade. Moneymanagement is about controlling the size of a trade.

With a fixed percentage both questions collide to one question because the initial stop determines your risk and therfore your size.

See also http://radio.weblogs.com/0142482/stories/2004/11/27/DAX-tradingsystem.html

]]> By: Online Trading http://tradermike.net/2005/07/position_sizing/#comment-1508 Online Trading Tue, 05 Jul 2005 10:00:50 +0000 http://www.tradermike.net/2005/07/position_sizing/#comment-1508 <strong>What about Position Sizing?</strong> Michael from TraderMike.net references an interesting study by Dr. Van K. Tharp about another important side of trading – position sizing. A position sizing model simply tells you 'how much' or 'how big' of a position to take. Position s... What about Position Sizing?

Michael from TraderMike.net references an interesting study by Dr. Van K. Tharp about another important side of trading – position sizing.

A position sizing model simply tells you ‘how much’ or ‘how big’ of a position to take. Position s…

]]> By: TheArchitect http://tradermike.net/2005/07/position_sizing/#comment-1501 TheArchitect Tue, 05 Jul 2005 08:36:53 +0000 http://www.tradermike.net/2005/07/position_sizing/#comment-1501 A very interesting subject, and one that i never gave much thought to before. Now that I am becoming more systematic in my trading I will definately investigate this aspect more. Thanks for the great article! A very interesting subject, and one that i never gave much thought to before. Now that I am becoming more systematic in my trading I will definately investigate this aspect more. Thanks for the great article!

]]> By: O Blog Investidor http://tradermike.net/2005/07/position_sizing/#comment-1507 O Blog Investidor Mon, 04 Jul 2005 22:16:26 +0000 http://www.tradermike.net/2005/07/position_sizing/#comment-1507 <strong>4th of July - Independence Day</strong> A última actualização do Blog TraderMike tem um artigo bastante interessante sobre o tamanho das posições, com links bastante interessantes também. Apesar de no Blog Investidor cada posição ter um peso de 1/3 do capital total, não significa que é a mai... 4th of July - Independence Day

A última actualização do Blog TraderMike tem um artigo bastante interessante sobre o tamanho das posições, com links bastante interessantes também. Apesar de no Blog Investidor cada posição ter um peso de 1/3 do capital total, não significa que é a mai…

]]>