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
