I don't have a pre-defined percent for individual trades. I'm using the risk:reward ratio to calculate approximate share size.
For example, on the QQQQ trade this morning. I didn't want to risk more than $250.00 so I took $250.00 divided my risk $0.25 (difference between my entry price and my stop) and took a position of 1,000 shares. My target was $44.00 so my risk:reward ratio was 3:1 and the trade made sense. This type of measured risk ensures that I won't incur too much damage on any individual bad trades.
Also, in Canada we don't have the 4:1 margin available to daytraders in the U.S.. Our margin is calculated on each individual stock and usually varies between 25-30%.
Thanks to Basim for pointing this one out.
Also check out charts of interest at HCPG
4 comments:
Great site...thanks again for all the good charts...I love ICE, keep up coming...
You seem to go with the market and not swing toward the side of the bull or bear...very objective..
thanks
hi Jamie.
I have a money management question for you. On your dummy trades, how much percent of your portfolio do you allocate to any single trade?
thnx. BAsim.
Thanks Don. I love ICE too as you can see from my daily trades.
Hi Basim,
I don't have a pre-defined percent for individual trades. I'm using the risk:reward ratio to calculate approximate share size.
For example, on the QQQQ trade this morning. I didn't want to risk more than $250.00 so I took $250.00 divided my risk $0.25 (difference between my entry price and my stop) and took a position of 1,000 shares. My target was $44.00 so my risk:reward ratio was 3:1 and the trade made sense. This type of measured risk ensures that I won't incur too much damage on any individual bad trades.
Also, in Canada we don't have the 4:1 margin available to daytraders in the U.S.. Our margin is calculated on each individual stock and usually varies between 25-30%.
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