I’ve been getting a lot of questions around position sizing, so I’m reposting this article I wrote over a year ago, and providing some additional context around the percentage of capital one should risk in a trade and how to size up and down based on conviction.
It's usually our highest conviction trade that hurts us the most -- can't agree more! I learn it the hard way. However, many successful traders say, when an "A+" set up comes, one must jump on it with larger-than-usual size. I guess there is just no definite answer to this question, like anything in trading. Thanks, Geo, another great piece!
It's usually our highest conviction trade that hurts us the most -- can't agree more! I learn it the hard way. However, many successful traders say, when an "A+" set up comes, one must jump on it with larger-than-usual size. I guess there is just no definite answer to this question, like anything in trading. Thanks, Geo, another great piece!
When a one third reduction in position sizes are triggered, is it 5/10% of the whole portfolio high water mark? Or individual trade water mark?