![]() ![]() ![]() ![]() But before you begin to incorporate a strategy with variable position sizing, you should first learn to be thoroughly comfortable with a consistent approach to position sizing. Once you’ve proven that you can consistently and profitably trade the strategy over a meaningful period of time (months, not days), you can begin to modify your position sizing strategy to help you take advantage of times when you should either increase or decrease position size. Don’t worry about transactions costs (such as commissions), just worry about learning to trade the strategy and follow the process. The problem is that most traders have a much greater chance of losing than they do of winning while they learn the intricacies of trading the new strategy.It’s best to start small (very small) and minimize the “tuition paid” to learn the new strategy. The most frequent reason given is that they don’t want to “miss out” on that big trade or long winning streak that could be just around the corner. So many traders who trade a new strategy start by immediately risking the full amount. ![]()
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