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Showing posts with label position sizing. Show all posts
Showing posts with label position sizing. Show all posts
Sunday, September 6, 2020
Monday, June 17, 2013
Online Simple Trade Management that I use in my Trading Plan
The following diagram illustrates how to use Position Sizer Calculator and Profit & loss Calculator
to make up a trading plan.
1) Enter the following information in the Dynamic Position Sizer Calculator
a) Max Cost: ; capital outlay for this trade
b) Risk: ; dollar amount of risk to take
c) Buy/Sell Price: ; Entry or Short Sell Price
d) Stop Price: ; Sell or Cover Short Price
e) Position Type: ; is it a Long or Short order
f) Shares to Buy/Sell: ; this will automatically determine the quantity to buy/sell
2) Enter the following information into the Profit & Loss Calculator
a) No. of shares ; taken from the auto-compute Position Sizer
b) Buy Price ; Entry Price
c) Cut Price ; Stop Price
d) Target Price: ; Near term resistance level
3) Once this is done, you will know the following
A) Risk to Reward Ratio ; whether a trade should be taken or walked away
B) Break Even Level ; when the trade will become profitable.
C) Potential Profit & Loss Amount
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