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Position size

QuestionsCategory: QuestionsPosition size
Chen Chen asked 2 years ago
Let’s say if the account is 100k, the full position is 25% of the equity, which means each trade I will buy the stock worth 25000, and then whatever my stop is on the % is the stop. Based on the Risk %, every time my risk amount is different? Is that the right way to do it? The way I did was I risk 1% of the total equity as full position, and 0.5% as half position, which means each time I risk 500 or 1000, doesn’t matter how much I risk on the %, but I always hear people say low-risk entry, I was confused because it doesn’t really matter, I am going to lose 500 or 1000 anyway, if it is 2%, 4% or 8%, once I am on the wrong side of the trade I realized I could be misunderstanding the concept, the right way could be full position 25000, half position 12500, and quarter position 6250. Depending on the % I risk each trade the actual dollar amount could be very different, the less % I set as stop-loss the less risk I take I hope you understand what I am saying here, please let me know the correct answer, really appreciate it
1 Answers
Avatar photoOwen Staff answered 2 years ago

Hi Chen,
Pat made this video for you...