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Position Sizing

 

We follow Dr Van Tharpe’s methodology in position sizing. In our view this method keeps your risk at manageable levels. In a nutshell, you decide the amount of your portfolio that you are willing to risk throw some magicly simple math into the equation and off you go.
 
Position sizing is so important to controlling your risk that we recommend that you get Dr Thorpe’s books and study it for yourself.
 
Why is position sizing so important?
 
  • Reduce risk of ruin
  • Manages risk better
  • Enhances ability to cut losses quickly and let profits run
  • Reduces emotional trading
  • Reduces stress
  • Assists in evaluating risk/reward ratio 
  • Assist in reducing trading mistakes
 
 
The Process.
 
 

http://www.vantharp.com/tharp-concepts/risk-and-r-multiples.asp

 

Disclaimer

Each trader has different position sizing, risk parameters and execution prices which will change overall  portfolio return. We do not give financial advice. Trade at your own risk. We are not responsible for any losses you may have by following our blog. We are only making known when we enter or exit a stock. The numbers that we are disclosing are a record of entries or exits made since the start of this blog. We may or may not show each stock that we own or are following  We may not show other transactions not mentioned on this blog. The prices mentioned here may or may not show our real transaction execution prices. Percentages may represent an aggregate of stock holdings. Calculations may not be accurately reflected. Trade at your own risk. We are not responsible for any losses you may have by following our blog.

 

 
 
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