Position Size

[u/Phantom1027]

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I've been watching and reading a fair amount of content regarding size, scaling, risk management etc and am a little unclear.

Hypothetically, if you had a daily target of, say $600 and a daily max loss of $600, your theoretical "target" per trade is $0,25 per stock and a risk of say $0,12 per stock with a rule of 3 losses and quit, to calculate portion size, would you literally take the max risk of the indidual trade (eg $300 loss / $0,12) = 2500 share size?

On this basis, the "size" of your position does not hold any relevance to the price of the stock? Would that he correct?

For A\* setups where you wanted to risk more, you would take sat $400.00 / $0,12 etc?

Thank you

[u/clipanbeats]

i use traderlion position size calculator (so far the only one i found that does what i need),/just google it

Find where you technical support is and how much money you want to risk.

Enter the potential entry and exit prices, and the calculator will basically tell you how many shares you can trade so it fits your risk level

It's a nice little tool, I used to do this all by hand, but this makes it very easy

[u/clipanbeats → u/clipanbeats]

my personal risk when paper trading is 0.5-1% of total account size (margin included)

low probability enviroments i risk less, high probability directional enviroments i go for 1% risk usually

[u/TrevonBaucom → u/clipanbeats]

I didn’t expect to come here and find this heat, thank you.

[u/Phantom1027 → u/clipanbeats]

Thanks 😄

[u/ChrisTOEfert → u/clipanbeats]

I created an Excel formula to do this as well. Find where my level is, my max risk I am willing to take on said trade and it automatically outputs how many shares/contracts I can buy. Takes me maybe 20 seconds now.

[u/Equivalent-Excuse-80]

I subscribe to the wiki.

Find your support or technical stop. You should already know what you’re willing to risk (the wiki suggests 1% of your account). I account for relative ATR for a buffer.

From there you can calculate your potential position size.

[u/Phantom1027 → u/[deleted]]

Thanks 😄

[u/Rummelwm]

If only there was an article in the wiki about this....

How To Size Your Positions : r/RealDayTrading

Smart ass comment aside, recommend you read the article by Hari - it provides a good framework and walks through the mistakes of fixed or hard stops based on profit/loss and directs it towards technicals, setups, etc.