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Positionsizing

[How to] easy position sizing on BitMEX ? (Very important)It’s an essential element of success for every trader. Because traders frequently take a random position size. This may look like them deciding to take a larger position if they feel really confident about a trade, or, alternatively, opting to take a smaller position if they feel a little less confident. However, this may not be the most informed or strategic methodology for determining the size. tl;dr : start trading with proper position sizes on tradingdesk.cloud Similarly, a trader should not just elect a pre-determined position size for all trades, regardless of how the trade sets up; this style of trading will likely lead to underperformance in the long run. So, if it's not in the best interest of an investor to select a random position size, and it's not a good idea to set a uniform size for all trades, what is the best way to evaluate the optimal position for a trade? Understanding Position Sizing Position sizing refers to the size of a position within a particular margin, or the amount that an trader is going to invest. You should use position sizing to help determine how many shares can purchase, which helps them to control risk and maximize returns. While position sizing is an important concept in most investment type, the term is most closely associated with day trading KEY TAKEAWAYS Position sizing refers to the number of units a trader invests in a particular trade. Determining appropriate position sizing requires a trader to consider the risk tolerance and the size of the account. While position sizing is an important concept in most every investment type, the term is most closely associated with faster-moving investors like day traders and currency traders. Even with correct position sizing, investors may lose more than their specified risk limits if order get executed below the stop-loss order.
BITMEX:BTCUSD.P
by tradingdeskcloud
Kelly Criterion: Why YOLO Trading FailsThe Kelly Criterion is a formula that calculates the optimal bet size based on known probabilities that maximizes gains while minimizing ruin... or not getting “rekt” . When we read social media and see infographics of "if you had just invested all your money into THIS you'd have THAT MUCH" it is tempting to dream about how rich we could be just betting BIG . Unfortunately in the real world statistics tell us that this is rarely the truth. However, statistics can tell us what we should do...
BITFINEX:BTCUSDEducation
by norok
9
Position Sizing and Risk Management (for newer traders)Stop gambling! I see this all of the time, too many new traders using max leverage on every single trade. Do you want to see steady growth in your account? Then stop here and let this really sink in, use the same amount of risk on every trade. For example, if your risk is 2% of your account size per trade then make sure no matter where your entry is your stop loss and position sizing is always correct so you don't lose more than 2%.
Education
by Nick1upTrading
Improved Version : How Do "Whales" Trade ? CAUTION : EXPERIMENTAL Hello friends. Whale trading system has been developed and placed on a more reasonable ground. So this publication is an improved version of the educational idea : How do "Whales" Trade? Before Starting In related ideas, you can see the first version and the script I used to create this idea. And there is an intermediate version that shows the logic after separating the bull - bear zones. RULES First of all, there is absolutely no short position to reduce the risk of this system. Negative regions are sales regions. (Not short position) Position sizes are shown in the presentation.We split our capital 100 . (Or you can accept your entire position size 100.) We certainly don't try with all our capital. It can be tested with reasonable capital allocated for instruments. At each change of region, we dispose or purchase all of our position size. And the values in the presentation are our graded position amounts . Now that we've benefited from regional changes, I found 10 levels reasonable. Let's write our position sizes here too : STAKES Pos Size 1 : % 0.4329 Pos Size 2 : % 0.8658 Pos Size 3 : % 1.2987 Pos Size 4 : % 2.1645 Pos Size 5 : % 3.4632 Pos Size 6 : % 5.6277 Pos Size 7 : % 9.1 Pos Size 8 : % 14.719 Pos Size 9 : % 23.81 Pos Size 10 :% 38.52 Note : Position size ratios are formed by coefficients based on gold ratio to provide a logical example. Let us now examine the region from January 22, 2018 to August 26, 2019. I'm doing trade and distributional trades for 1 bar after eye decision and signals to be fair. TRADES AND TRICKS After the sell order arrives on January 22, we wait until distributional buying points arrive. First distributional Buy Signal was on 7 May 2018 (close ) , so it means : Our first Distributional Buy was between 7 - 14 May 2018. Let's start : Distributional Buys : 1.Buy : 8572.5 Position Size : %0.4329 2.Buy : 7847 Position Size : %0.8658 3.Buy : 7456.5 Position Size : %1.2987 4.Buy : 6563.5 Position Size : %2.1645 5.Buy : 6786.5 ==> Rejected , because price is higher than last Buy. 5.Buy : 6507.5 Position Size : % 3.4632 6.Buy : 6396 Position Size : % 5.6277 7.Buy : 5837.5 Position Size : %9.1 8.Buy : 3940 Position Size : %14.719 9.Buy : NET Long Signal : 3493.5 Position Size : The Rest ==> (100 - All) = %62.328 Distributional Sells 1.Sell : 10919 Position Size : %0.4329 (May be higher than the amount of earnings. For example : % 25 Here we are improvising according to obligatory market conditions. I wrote the first rate in order to follow the example rule, but I would sell between 25% and 40% in live trade. Because the profit is too high.) 2.Sell : 10146 Position Size : %0.8658 ( Normally I shouldn't have sold it because it was lower than the first sale. But the profit is still very high, but it is decreasing, so I sell. A much higher quantity can be sold here, as is the same on the top. I'm writing the next rate to keep the rule.) 3. Sell : 11376 Position Size : % 60 ( Now profitability is at its peak , I ignore the stake rules and going to improvise. Instead, the first 3 - distributional sales: 10% - 20% - 40% with values such as making it much more reasonable.) 4.Sell : NET Sell Signal : 9970.5 Position Size : The Rest ==> (100 - All) = %38.8 Note : I could have gone a lot more profitable than my earnings, but to avoid stretching the template, I applied the first 2 ratios. A professional could have been more profitable here: Example: 40 - 60 and close. So I'm going to calculate these rates. CALCULATIONS ( For 100 unit = Full Position Size ) Average Cost : (8572.5 * 0.4329 + 7847 * 0.8658 + 7456.5 * 1.2987 + 6563.5 * 2.1645 + 6507.5 * 3.4632 + 6396 * 5.6277 + 5837.5 * 9.1 + 3940 * 14.719 + 3493.5 * 62.238) / 100 = (3711.04 + 6793.93 + 9683.76 + 14206.7 + 22536.8 + 35994.77 + 53121.25 + 57992.9 + 217428.5 ) / 100 Average Cost = 4215 Average Sell : (10919 * 0.4329 + 10146 * 0.8658 + 11376 * 60 + 9970.5 * 38.8 ) / 100 = (4726.84 + 8784.41 + 682560 + 386855.4) / 100 Average Sell Price = 10829.27 SUMMARY Percentage of net earnings per unit (Full Position Size): ((10829.27 - 4215 ) / 4215) * 100 = %156.92 In doing so, commercials provided liquidity to the markets and did not have the problem of not finding buyers. Stoploss here means emptying the whole position, for me 4 bars means stoploss in all directions. More importantly, increasing rates will not harm us in non-trend areas. Because we start with low rates. Although comments and improvisation are very important, I tried to explain the system outlines by linking them to certain rules. Now we have gone more systematically than the first version !
BITMEX:BTCUSD.PEducation
by Noldo
4
EURUSD LONG - TradingView to MT4 BotSide: Long Risk: 10% SL: 60 pips Noice start this week! SEND SIGNALS FROM TRADINGVIEW TO MT4 www.tradingviewtomt4.com POSSIBLE COMMANDS Open Orders buy_SYMBOL_SLinPoints_Risk% sell_SYMBOL_SLinPoints_Risk% buy_SYMBOL_SLinPrice_Risk% (can be used for dynamic values) sell_SYMBOL_SLinPrice_Risk% (can be used for dynamic values) buy_EURUSDi_150_0.05 = opens a buy order on EURUSD with an SL 150 points away with 5% risk if SL triggers sell_EURUSDi_1.10200_0.03 = opens a sell order on EURUSD with an SL at 1.10200 with 3% risk if SL triggers Close Orders close_SYMBOL_%toClose_none close_SYMBOL_%toClose_break close_SYMBOL_%toClose_(price) (can be used for dynamic values) close_EURUSD_50_none = closes 50% of an open order and SL stays the same close_EURUSD_0_break = closes 0% of an open order and SL moves to breakeven if trade is in profit close_EURUSD_25_1.10200 = closes 25% of an open order and SL moves to price that is stated Update Orders update_SYMBOL_SL1_SL2 (can be used for dynamic values) The logic of this command differs slightly and serves as a trailing stop between two dynamic values if your indicator provides that. For example, if current trade is a BUY, after sending this command, it will move Stop Loss to SL1, if it’s a SELL, it will move Stop Loss to SL2. update_EURUSDcn_1.10300_1.10100 = If we are in a BUY, Stop Loss would be updated to 1.10300. If we were in a SELL, Stop Loss would be updated to 1.10100. If you used dynamic values in trading view, the command would essentially look like this: update_EURUSDcn_{{plot_3}}_{{plot_4}} SEND ALERTS FROM TRADINGVIEW TO MT4 www.tradingviewtomt4.com WHY RISK MANAGEMENT? Trading can be very lucrative, we all know that, hence; why we became traders in the first place. Whether you found an awesome indicator script on TradingView, an Expert Advisor on MT4, or whatever other strategy that got you excited about trading in the first place; you will lose no matter how perfect a strategy works. I started trading with a strategy that had over 60% win rate and still lost half of my account. You may think I’m an idiot. I just didn’t understand it’s more important to know how much you can lose rather than how much you can make. So from now on, forget about gains. If your strategy’s win rate is above 50%, focusing on how much you can lose will always be more important. The gains will come on their own after that. Risk management is simple and only involves basic math. So let’s start with that: To understand the calculator in it’s entirety, you must know how to calculate profit from a winning position. We’ll use a FOREX example. Let’s say bought 1.00 Lot of EURUSD at 1.00100, a couple hours or minutes later, you closed it at 1.00200. First you subtract Close Price from Entry Price to get the amount of points you gained: 1.00200 - 1.00100 = 0.00100 100 points gain or 10 pips To calculate dollar profit you multiply by Lot Size and multiply again by 100,000. 0.00100 * 1.00 * 100,000 = $100 Gain * Lot Size * 100,000 = $ Great, so you made $100! If your balance was $1,000, you just made 10% return, amazing! But.. what if the trade had gone wrong? How do you even calculate how much you might lose? Well first, you have to choose a Stop Loss, this varies depending on your strategy. One of my 30m strategies has a Stop Loss between 150-200 points, while a 4hr strategy might have a Stop Loss between 600-650 points. Let’s say you’ve made up your mind and you’re going to choose a Stop Loss at 150 points, which means if price is at 1.00150, your stop loss would end up at 1.00000 on a Buy Trade. The key thing first is deciding what % of your balance you’re willing to risk. If I have $1000, you might be okay with losing 5%, which is $50. Now you use the formula above: Gain * Lot Size * 100,000 = $ In this case, we would substitute Gain with Stop Loss value instead. Stop Loss * Lot Size * 100,000 = $ 150 * Lot Size * 100,000 = $50 As you can see, we have to solve for Lot Size because we don’t know exactly how much to trade yet if our trade hits our Stop Loss, we’ll only lose $50. I won’t go into the algebra, so here is the final formula: Lot Size = 1 / (SL in Points / (Capital x Risk%)) Lot Size = 1 / (150 / ($1000 * 5%)) = 0.33 Trading 0.33 lot size with a hard Stop Loss of 150, we’ll only lose $50 or 5% of our balance. That’s basic risk management, and it’ll save you headaches from losing money on your trades. Don’t worry about doing the math yourself though, use our bot that auto-calculates your position based on your risk. Happy trading! SEND TRADES FROM TRADINGVIEW TO MT4 www.tradingviewtomt4.com
Education
by lightfalltrades
GBPUSD SHORT - TradingView to MT4 BotAlmost got stopped out on this one lol Side: Short Risk: 10% SL: 70 pips SEND SIGNALS FROM TRADINGVIEW TO MT4 www.tradingviewtomt4.com POSSIBLE COMMANDS Open Orders buy_SYMBOL_SLinPoints_Risk% sell_SYMBOL_SLinPoints_Risk% buy_SYMBOL_SLinPrice_Risk% (can be used for dynamic values) sell_SYMBOL_SLinPrice_Risk% (can be used for dynamic values) buy_EURUSDi_150_0.05 = opens a buy order on EURUSD with an SL 150 points away with 5% risk if SL triggers sell_EURUSDi_1.10200_0.03 = opens a sell order on EURUSD with an SL at 1.10200 with 3% risk if SL triggers Close Orders close_SYMBOL_%toClose_none close_SYMBOL_%toClose_break close_SYMBOL_%toClose_(price) (can be used for dynamic values) close_EURUSD_50_none = closes 50% of an open order and SL stays the same close_EURUSD_0_break = closes 0% of an open order and SL moves to breakeven if trade is in profit close_EURUSD_25_1.10200 = closes 25% of an open order and SL moves to price that is stated Update Orders update_SYMBOL_SL1_SL2 (can be used for dynamic values) The logic of this command differs slightly and serves as a trailing stop between two dynamic values if your indicator provides that. For example, if current trade is a BUY, after sending this command, it will move Stop Loss to SL1, if it’s a SELL, it will move Stop Loss to SL2. update_EURUSDcn_1.10300_1.10100 = If we are in a BUY, Stop Loss would be updated to 1.10300. If we were in a SELL, Stop Loss would be updated to 1.10100. If you used dynamic values in trading view, the command would essentially look like this: update_EURUSDcn_{{plot_3}}_{{plot_4}} SEND ALERTS FROM TRADINGVIEW TO MT4 www.tradingviewtomt4.com WHY RISK MANAGEMENT? Trading can be very lucrative, we all know that, hence; why we became traders in the first place. Whether you found an awesome indicator script on TradingView, an Expert Advisor on MT4, or whatever other strategy that got you excited about trading in the first place; you will lose no matter how perfect a strategy works. I started trading with a strategy that had over 60% win rate and still lost half of my account. You may think I’m an idiot. I just didn’t understand it’s more important to know how much you can lose rather than how much you can make. So from now on, forget about gains. If your strategy’s win rate is above 50%, focusing on how much you can lose will always be more important. The gains will come on their own after that. Risk management is simple and only involves basic math. So let’s start with that: To understand the calculator in it’s entirety, you must know how to calculate profit from a winning position. We’ll use a FOREX example. Let’s say bought 1.00 Lot of EURUSD at 1.00100, a couple hours or minutes later, you closed it at 1.00200. First you subtract Close Price from Entry Price to get the amount of points you gained: 1.00200 - 1.00100 = 0.00100 100 points gain or 10 pips To calculate dollar profit you multiply by Lot Size and multiply again by 100,000. 0.00100 * 1.00 * 100,000 = $100 Gain * Lot Size * 100,000 = $ Great, so you made $100! If your balance was $1,000, you just made 10% return, amazing! But.. what if the trade had gone wrong? How do you even calculate how much you might lose? Well first, you have to choose a Stop Loss, this varies depending on your strategy. One of my 30m strategies has a Stop Loss between 150-200 points, while a 4hr strategy might have a Stop Loss between 600-650 points. Let’s say you’ve made up your mind and you’re going to choose a Stop Loss at 150 points, which means if price is at 1.00150, your stop loss would end up at 1.00000 on a Buy Trade. The key thing first is deciding what % of your balance you’re willing to risk. If I have $1000, you might be okay with losing 5%, which is $50. Now you use the formula above: Gain * Lot Size * 100,000 = $ In this case, we would substitute Gain with Stop Loss value instead. Stop Loss * Lot Size * 100,000 = $ 150 * Lot Size * 100,000 = $50 As you can see, we have to solve for Lot Size because we don’t know exactly how much to trade yet if our trade hits our Stop Loss, we’ll only lose $50. I won’t go into the algebra, so here is the final formula: Lot Size = 1 / (SL in Points / (Capital x Risk%)) Lot Size = 1 / (150 / ($1000 * 5%)) = 0.33 Trading 0.33 lot size with a hard Stop Loss of 150, we’ll only lose $50 or 5% of our balance. That’s basic risk management, and it’ll save you headaches from losing money on your trades. Don’t worry about doing the math yourself though, use our bot that auto-calculates your position based on your risk. Happy trading! SEND TRADES FROM TRADINGVIEW TO MT4 www.tradingviewtomt4.com
Education
by lightfalltrades
AEP, American Electric Power Co. Inc. - Rectangle PatternNYSE:AEP People like to use indicators or oscillators many times to predict the next trend. Actually they can help you, but they will always be late. And above all, what do you do if they are in contrast with each other? Most importantly, do you have a backtest that proves in the long run that their use is profitable and valid on multiple markets and assets? We go ahead on our technical analysis, aware of what makes us through backtest statistics and confirmed in real operation for years now aware of the deviation that may have on the annual average. In this case we are waiting for a long breakout of this rectangle if it happens, knowing what is the Risk/Reward, the %Profitability, the size of the position aware of the entry and exit point and risk management. Stay Tuned! finance.yahoo.com
AEducation
by SwissTradingSchool
EXPN, Experian plc - Trailing Stop on Experian plcLSE:EXPN You have to understand that even if most of the time your trade turns against you, when the trend moves in your favour, you have to manage your position disciplinarily. Look in this trade as in the first operation we have succeeded in doubling the value of our position realizing exactly a good 200% on the allocated, and in the second operation we are still long currently with a profit not yet realized of 1000% and protected in case the trend begins a reversal or we suffered a heavy retracement. If these were my only two trades to profit in the last ten, so would be the situation of my profits/losses: 2 profit trades = (1*200%) + (1*1000%) - 8 trades at a loss = 8*100% = 1200% - 800% = 400% on allocated capital This is perfect position management.
LSE:EXPNLong
by SwissTradingSchool
Possible GBP/CAD Short Position !!SMP TRADING SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY Chart time frame - H4 Timeframe - 1-2 days Actions on - A – Activating Event Market will meet resistance in zone @1.772 - .... and fall to the @1.74 In order to enter, the pair MUST be in line with my Entry Procedure.... B – Beliefs Market move towards the first Target 1 level @ 1.74 OANDA:GBPCAD Trade Management Entered @ ..... Stop Loss @ ..... Target 1 @ 1.74 Target 2 @ .... Risk/Reward @ 4.1 Happy trading :) Follow your Trading plan, remain disciplined and keep learning !! Please Follow, Like,Comment & Follow This information is not a recommendation to buy or sell. It is to be used for educational purposes only!
Short
by SMPTrader
1
Money Management 101SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY Money Management 101 Are you receiving a win-rate of more then 60% and still loosing money?? Money Management may be an area that you need to focus on. It is an essential element in becoming a professional trader. Listed below are 4 Simple Steps To Evaluate Your Financial Health; 1. Position Sizing A portfolio of $... and I decide to only risk 2% on a trading strategy 2. Capital - How much? A portfolio of $.... 3. Loss - How much? I must be right more then 50% of the time, but win more money on winning trades versus losing trades. I will use stops and limits to enforce a risk/reward ratio of 1:2 or higher 4. Profits - What? A profit/loss ratio refers to the size of the average profit compares to the size of the average loss per trade. For example, if your expected profit is $1500 and your expected loss is $500, the P/L ratio is 3:1 Please let me know if you have any questions :) Happy Trading "The simpler it is, the better i like it" Peter Lynch
TVC:GOLDEducation
by SMPTrader
EUR-USD analysis, and the correct POSITION SIZING in ForexFor the next three weeks, I will be on vacation but before, my analysis on EUR-USD and a little lesson about opening the correct POSITION SIZING in a trade. If EUR-USD closes above the blue trendline, there will be a bullish signal with the target area at 1.1883/1.1892 and the stop loss at 1.1560/1.1565. Before click on "BUY" or "SELL" you have to decide not only the stop loss and target (as you can see in the chart above) but also the maximum loss you are willing to suffer, in the case your operation doesn't go as you have analysed. This is a fundamental aspect because you must always to put yourself in the best condition to do trading and a loss never have to give you stress and cause problems to your account. There are different ways to calculate the position size depending on the type of market. Following, you will see the calculation for the Forex market. So, I will show you how to open a proper Forex position based on your risk appetite. In such a way, even though the currency pair reaches the stop loss, this will not create any problems for your account and stress for you. I do that, by taking as an example the analysis above on EUR-USD. Let's say you buy the currency pair at 1.1730 with, as you have seen, the stop loss at 1.1560. Your maximum loss bearable is $ 200. How much do you have to invest in this trade? You obtain the position to open with this formula: Position Size = / value 1 pip Where: MAX LOSS is your maximum bearable loss you ($ 200); PIPS OF STOP is the distance in pips between the entry price and the stop loss; VALUE OF 1 PIP is the minimum value of a pip for $ 1,000 of purchase/sale of EUR-USD. For the last parameter, for calculating the value of 1 pip of a currency pair, I don't want to insert link to my or other websites. On Google, you can find several tools for getting this value. Returning to the example, the position size to open is as follows: Position Size = / 0.10 = $ 11,764 If you establish the maximum loss not with a fixed amount in dollars (or in your currency) but with a percentage, the formula varies as follows: Position Size = / value 1 pip Where CAPITAL is the amount of money in your trading account, and %OF MAX LOSS is the maximum percentage of your capital you are willing to lose in the trade. If for example, you have a capital of $ 50,000 and your maximum loss is 0.75% of your capital. The position size to open is: Position Size = / 0.10 = $ 22,058 This aspect of trading is as simple as little used and is the first step to become profitable. I hope this brief lesson help you to improve your trading. Good summer everybody!!
by TradingwDavid
1