StockFetcher Forums · General Discussion · Optimizing bets and bet size<< >>Post Follow-up
cubtrader
14 posts
msg #77911
Ignore cubtrader
8/24/2009 8:13:19 PM

Does anyone know what formulas (or book) I might want to look at in order to get a handle on wager optimization and best bet size? And when I say wager I mean trade.

Thanks……..


Kevin_in_GA
4,553 posts
msg #77913
Ignore Kevin_in_GA
8/24/2009 9:01:43 PM

My rule of thumb is to never risk more than 1% of my working capital on any trade.

So, If I am trading $50,000, I will break it up into 10 $5000 bets, and put a 10% trailing stop in place. At 20 bets, it would be $2500 each with a stop loss of 20%. This always leaves me with a well-defined risk level, which you need to determine for your personal trading style and risk tolerance.

miketranz
716 posts
msg #77914
Ignore miketranz
8/24/2009 11:23:22 PM

Cubtrader,you don't need a book to define your own trading risk.Everyone has their own risk tolerance.There are three ways to define risk,but the bottom line is actual dollars.1)Percentage risk,of your account 2)Point risk of your trade3)Dollar risk of your trade.My advice is when you enter a position,always know in advance what you're willing to lose in real money.Keep that amount as small as possible.Use common sense.If you work for $200 a day,how would you like to lose $1000 on a day trade? Don't think it can't happen.Learn to lose less money on each trade you take and you'll be on you way to becoming a better trader.Always remember,if the stock trades below the price you entered,you're in dead money.Think of it as a directional move.If the stocks not going in the right direction,scratch the trade,save your account.It's all about discipline.The most successful baseball players don't hit every pitch.The key is,you want to be around long enough to trade profitably.Keep your losses to a minimum,good luck.........

cubtrader
14 posts
msg #77949
Ignore cubtrader
8/25/2009 12:41:48 PM

Thanks guys….I was just wondering about different money mgt strategies.

four
4,012 posts
msg #127477
Ignore four
3/2/2016 11:24:14 PM

http://www.moneyandmarkets.com/secret-law-markets-76327?t=ezine

Kevin_in_GA
4,553 posts
msg #127479
Ignore Kevin_in_GA
3/3/2016 10:09:37 AM

More thoughts on this:

http://www.stockfetcher.com/forums2/Filter-Exchange/VOLATILITY-BASED-STOP-LOSSES-AND-POSITION-SIZING/117617/-1/117617

StockFetcher Forums · General Discussion · Optimizing bets and bet size<< >>Post Follow-up

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