June 27, 2017

The Importance of Position Sizing

Position Sizing How much should you allocate to each trade? This frequently asked question lacks definitive answers. Why? The answer is quite simple; as investors, we all have a different set of goals. There are just too many variables out there (age, income, retirement goals, spending habits, etc.) to give a universal answer to the question. Options brokers allow you, the investor, the flexibility to allocate your account by specified dollar amount, specified quantity, percentage of available buying power, etc. It is your responsibility to figure out what works with your risk tolerance and investment goals. This brings us to the important and rarely covered topic of Position Sizing. To many investors, especially options … [Read more...]

Position Sizing

Position sizing is an important aspect of risk tolerance and diversification. It could be the most important aspect of any options portfolio. No one likes to discuss losses but they are inevitable and you must be well-equipped when the time comes. Here are a few must-read articles to help you along the way. Click around and I am sure you be pleased with what you learn. Pass it along! Position Sizing  A must read! Trader Mike offers a resourceful and well-written article on one of the most important aspects of any trading system. – Another wonderful and insightful article.  Today the market consolidated after Friday's big surge. It seems we could be in for a fairly tight range until Wednesday's Fed meeting at 2:15. RSI Wilder … [Read more...]