Normal
We're using fixed fractional position sizing in this thread. The fraction that we are risking per trade is 1% of starting capital plus profits. This means the % gain of a stock is not what's important. The important aspect is the reward/risk ratio. We're risking 1% on each trade regardless of the price of the stock. If we can get a +2R result it doesn't matter if the stock price is 0.05 or $50. If you use a small initial SL on a higher priced stock, then yes the parcel size becomes too big relative to your account size. In this thread we apply a 20% limit.
We're using fixed fractional position sizing in this thread. The fraction that we are risking per trade is 1% of starting capital plus profits. This means the % gain of a stock is not what's important. The important aspect is the reward/risk ratio. We're risking 1% on each trade regardless of the price of the stock. If we can get a +2R result it doesn't matter if the stock price is 0.05 or $50.
If you use a small initial SL on a higher priced stock, then yes the parcel size becomes too big relative to your account size. In this thread we apply a 20% limit.
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