FIRECalc: A different kind of retirement calculator Position Sizing Strategy One of the most important, yet most overlooked aspects of investing is position sizing. When investing in the stock market, you should always know how much should you be willing to lose before establishing a position in a stock. Known as risk or capital management, controlling how much you are willing to lose on each stock investment goes a long way to increasing your overall return. One method used by many investors is to establish the size of each stock position based on their tolerance for risk. Dr. Van K. . To establish a baseline he simulated the purchase of 100 shares of stock whenever a buy signal was encountered. As you can see, position sizing is a proven technique that investors can use to align their share purchases with their risk strategy. The objective of the percent risk method is to identify how much you are willing to lose on any stock trade based on the total size of your portfolio. Employing a well thought approach to position sizing for a new stock buy will pay off.
Wide World of Charts Posted by JC Parets on October 5th, 2011 Major Changes Took Place Today To The Markets In Which I Have Held Positions (PeterLBrandt) The TBTFs Have Take Out Almost All Their Post-March 2009 Gains (Zerohedge) Piercing the Bearish Veil (chessNwine) To Those Who “Don’t Believe In Technicals”, Look at $AAPL (Ritholtz) Sam Stovall: 80% Likelihood of Bear Market in 2012 (YahooFinance Breakout) Awesome rip on the $SPY to close out Tuesday (Gtotoy) The Key to Predicting Future Stock Price Movements (PragmaticCapitalism) Charting The Breakdown and Key Level in CRB Index (AfraidToTrade) Scott Redler Charts $AAPL and Head & Shoulders for S&P500 (CNBC) Traders Ask: How Does Your Posture Affect Your Trading (SMBCapital) Tags: $BAC $C $GS $WFC $JPM $SPY $SPX $CRB $AAPL $CPHD $GCO Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.
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