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Stock Market Trading
Money
Management
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Testimonials
Great
site Kenny.
Technical
Analysis written in a straightforward way so that everyone understands.
There's
only a small few who get it consistantly correct and you are certainly
in
that group.
Chris
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Thanks
for putting this all together and sharing! BHW
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Awesome
Stuff! Kenny has shown time and time again the ability to show us direction in
these markets. Khalsa
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Kenny, I appreciate your insight and analysis. You make sense of what I can rarely see.
Thanks for sharing. Gene
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Took a gold short at 1240
just closed at 1203 :-)))))))))))))))))) ........ top call!! Gekko |
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Trading
Position Size Guide
Learn
Stock Market Trading Money
Management
Trading Position Size
Getting
the trading position size
correct is a key element of a
stock market Trading
Money Management System. It can make or break a
perfectly good trading strategy and if the sizing of a trading position
is not
correctly applied, it can potentially cause lasting destructive issues
for the trader.
Most new traders are inclined to trade too heavily in proportion to the
amount of trading capital that is available to them. They may even
start off with small trades but are very likely to let these get out of
control either through over confidence or chasing initial losses that
have been incurred.
Why is the Size of Trading
Positions So Important
Why are the levels of trade sizes so
important?
If
Trade
Size is Too Small -
In the case where this is too conservative, a
trader will never make any significant gains and boredom can set in,
leading the trader to becoming complacent and careless about where he
enters a trade. Even if the losses are small, these can mount
up into a significant proportion of a traders capital.
If
Trade
Size is Too Large - When this is set
too high, a small number of losing trades can lead to a
disproportionate sized loss in a traders account. This can then begin
to affect a traders ability to view any trade in an effective and
impassive manner as emotions begin to cloud the traders judgment.
Fear of losing even more capital can lead to the closing a trade at
exactly the wrong moment. The traders new found tendency to focus on
the negatives causes indecision, resulting in additional losses and
smaller gains as winning trades are cut short.
This can lead to significant and long term issues for a trader if it
continues and it is at this point that most new stock market traders
give up and throw in the towel having lost most, if not all of their
initial trading investment.
Traders Day Trading Position Size
Calculator
Traders
Day Trading have created a Trading Money
Management excel worksheet
that incorporates a built in trading position size calculator to
help
anyone learn how to develop a level of trading size that they are
comfortable with for their individual style of trading.
There are a few variables that must be entered into the calculator
- Total
Portfolio Value
- Maximum
% loss of capital that can be risked
- Trade
entry price
- Stop
Loss level
- Profit
target price
The
calculator will then automatically display the maximum size of position
that should be entered to maintain the level of risk that the trader is
prepared to accept on that trade. The Position Size
Calculator also
calculates the potential profit as well as the potential loss for that
trade allowing the trader can compare at a glance, how much is risked
to how much the expected gain.
Initially, we are making our stock market Trading Money Management
worksheet available through our Free subscription
based mailing list, but it will be made available more widely at some
point in the future. Meantime it can be accessed completely free
through our Ezine subscription and via the link just below.
Free Excel Trading and Investment
Money Management Worksheet with Trading Position Size Calculator
Learn Successful Trading Money Management Systems with our
free excel
money management position size worksheet.
The easy to use worksheet is for planning trading position size in
stock market trading and investment strategies with Stocks and Shares,
Forex, Commodities and Futures, Options and CFDs and will help anyone
to learn about trade position sizing in Money Management strategies.
Download the
Traders
Day
Trading
Money Management Worksheet with
Free Position Size
Calculator
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Trading Money
Management Books - Van Tharp Books
Van
Tharp is a leading trading coach that has written 3
acclaimed books on
the
topic of trading psychology and trading money management systems, of
which, the Super
Trader Expanded edition is his latest.
"Using the lessons of Super Trader, you
will approach trading as you
would a small business - realistically, systematically, and
enthusiastically. Drawing on his decades of experience, Van Tharp has
created a simple plan designed to help anyone master the market. You
can put this plan to use immediately in order to...
- Master
the psychology of trading
- Craft
a 'business plan' -- a working
document to guide your trading
Develop a trading system tailored for your personal needs and skills
- Create
position-sizing strategies to meet
your objectives
- Monitor
yourself constantly to minimize
mistakes
Throughout
the book, Van Tharp
asks the pertinent questions you must ask
yourself about becoming a trader, being a trader, and succeeding as a
trader.
The rewards
that come with being a Super Trader--both financial and
personal--make you feel as if you can leap small buildings in a single
bound. Whatever your skill level, Van Tharp provides the formula for
succeeding in a field where most people fail.
Learn more about Position Sizing and
stock market trading money management
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