In this article, you’ll learn everything you need to know about position sizing in your trading. You’ll learn why position sizing meaning is important, the best position sizing models and the way to implement them.

Great question – thank you for taking the time to ask. There are several approaches to this, however I exploit what is probably the simplest – Total Equity. For each new trade I look at the total liquidation value of my account and use that level for position sizing. The advantage of this is that the growth in account caused by long term trend following trades that can remain open for months benefits the shorter term systems with increased size even though the trend following positions are still open.


One particular comment although. When you explain a spot as one of several reasons for choosing Percent vs Percent risk sizing for fight stop loss cases, is it because the gap causes the to sell below the stop loss by an unknown ammount since in that “gap” scenario, stop loss isn't defining the exit price? Otherwise, if gap didn't exist both methods shouldn´t be similar?

The fact is, a -five R-various trade that existed before could come back and Chunk you while in the future. Make sure that the risk-for each-trade you take on takes into account the worst trade in your backtest.

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Now, The true secret thing that you may notice in the event you look carefully here around the very left-hand side is the worst single trade in this entire backtest, a loss of 5.1 multiplied from the intended risk.


Using stops in forex markets is typically more significant than for equity investing as the small changes in currency relations can promptly lead to massive losses.

Nevertheless, several effective and functional techniques and approaches can help traders safely scale their trading position size.



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