Risk Management

Position Sizing

• Goal of position sizing is to manage risk and maximize returns by determining the appropriate amount of capital to allocate to each trade based on the trader's risk tolerance and the specific trade setup.
• General conviction is to risk only 1% of capital on each trade
• You can adjust this percentage based on number positions you want to keep open at a time | Position % |Risk|Stocks| | -------- | ------- | ------- | | 100 |1% | 1 | | 50 |2% | 2 | | 25 |4% | 4 | | 12.5 |8% | 8 |