Position
Sizing when Day Trading
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Part and
parcel of becoming a good trader is the use of correct 'Position
Sizing' when you trade. In its most basic form, Position
Sizing is the means by which you determine how large a trade
you can undertake, given your account size, the instrument's
volatility and your own personal tolerance for risk.
To make
life easier, we offer you here the 'Camarilla Position Sizing
Calculator', which may help you calculate easily the maximum
position size you should undertake given any particular conditions.
This is something that a standard day trading newsletter or
tip sheet WON'T be able to offer!
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- Account
Size:- How much money you currently have in your trading
account
- Risk
Tolerance:- How much of that money you are prepared to risk
on a single trade in percentage terms (e.g enter 5 if your
risk tolerance is 5%).
- Stop
Loss Size:- how many points you want your stop loss to be
for the instrument you are trading. For example, on the
S&P, if you wanted a 2 point stoploss, enter 2. If you
are trading IBM, and want a 1 dollar stoploss, enter 1.
- Unit
Cost:- the value of a 1 point move in the security's price.
For a stock priced in dollars you would enter 1. For an
S&P emini contract, you would enter 50 (as it moves
50 dollars per point). For a full size S&P contract
you would enter 250 (because it moves $250 per point change).
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| Note:-
the Position Sizing Calculator is offered for entertainment
purposes only - there is no substitute for real-world market
experience when deciding how to put on a trade.We make no warranties
about this free tool's accuracy or availability and stress that
as usual, it does NOT make recommendations about particular
investments under any circumstances. The usual disclaimers appy
(see below). SureFireThing.com will not enter into any email
correspondence or other discussion about this free webtoy. |
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