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TradersCALM - Simple Position Sizing
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Position sizing is a tool used by a majority of calm traders to improve their profits and reduce their losses and make profits more regular. Simple position sizing can be defined as altering the trade size (of one or more trading systems) based on the perception, by the trader, of the likely success of the trade and the traders perception of an acceptable risk of ruin. At each possible opportunity to enter a market, don't you decide whether to enter or not? Of course you do. This is a decision, based on your perceptions of success (however defined) to take the trade, with say your normal size, or not to take the trade. This is a position-sizing decision to use your normal size of shares or contracts or a use a position-size of zero based on your perceptions of success. So every trader at some basic level uses simple position-sizing. Under this topic ever more sophisticated uses of position sizing are discussed - follow the topic buttons to see more. |
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