My question had more to do with determining position
sizing, given that the value of the 9 EMA, LOD, or trend line
(for whichever day the order eventually fills on) won't be known
when you place your initial Buy Stop Limit order.
Previously you've talked about taking your maximum risk $$, and
dividing by the spread between your entry price and stop price, to
determine the number of shares to buy.
If you don't know which day the order will fill on (because it's
GTC) and your stop is, say, a descending trend line (meaning your
eventual stop will get lower the more days that elapse before your
trade fills) or the LOD for the day it eventually fills, then how
do you know what your $risk/share will be?
That's why I was asking if you use a constant $order size, or
constant #shares, or something else when determining the order size
for your Buy Stop Limit order.
Posted by jdaswani on 23rd of May 2018 at 10:54 am
Matt, Let me help out if you don'y mind
Position sizes tend to be arbitrary based on risk tolerance. For
argument sake.
You have $50k trading account, Normally it is not wise to exceed
10% of your portfolio. Can change depending on tolerance and
stops.
So you have $5k per idea, Now if you keep your stop at 5% of
entry, Max risk you take is $250 (Assuming NO GAP risk)
$250 loss on 50K is only .50%
Now if you told me, I am ok losing 1K on a trade, than you can
adjust position size up to 4x, while keeping the stop on.
Alway keep an eye on Volume, You don't want to get too large on
a position if it does not trade at least 100k shares a day.
If volume is low, keep position size small too, you don't
want to get larger than 5% of Average Daily Volume. So if it
trades, 50K shares a day, most you take is 2500 shares. Even if
that is below your calculated position size.
since you know where your order is, you pre-determine the # of
shares you buy. It doesn't matter if your fill various by a
few pennies.
yes over time you adjust stops - I tend to adjust stops once a
day at times, it's like a job, look at the open positions at night,
look at the chart, if you see stop can be adjusted, then edit the
active stop order. it's just something you do once a day like
a choir, like 10 - 15 min. I'll discuss more once I get back from
Disney Land, which I'm going later this week with the family, I
have too much active this week go launch any services like that,
which is why I will wait until I get back
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My question had more to
Trade Ideas comments
Posted by rojoch on 22nd of May 2018 at 11:27 am
My question had more to do with determining position sizing , given that the value of the 9 EMA, LOD, or trend line (for whichever day the order eventually fills on) won't be known when you place your initial Buy Stop Limit order.
Previously you've talked about taking your maximum risk $$, and dividing by the spread between your entry price and stop price, to determine the number of shares to buy.
If you don't know which day the order will fill on (because it's GTC) and your stop is, say, a descending trend line (meaning your eventual stop will get lower the more days that elapse before your trade fills) or the LOD for the day it eventually fills, then how do you know what your $risk/share will be?
That's why I was asking if you use a constant $order size, or constant #shares, or something else when determining the order size for your Buy Stop Limit order.
Make sense?
Matt, Let me help out
Posted by jdaswani on 23rd of May 2018 at 10:54 am
Matt, Let me help out if you don'y mind
Position sizes tend to be arbitrary based on risk tolerance. For argument sake.
You have $50k trading account, Normally it is not wise to exceed 10% of your portfolio. Can change depending on tolerance and stops.
So you have $5k per idea, Now if you keep your stop at 5% of entry, Max risk you take is $250 (Assuming NO GAP risk)
$250 loss on 50K is only .50%
Now if you told me, I am ok losing 1K on a trade, than you can adjust position size up to 4x, while keeping the stop on.
Alway keep an eye on Volume, You don't want to get too large on a position if it does not trade at least 100k shares a day. If volume is low, keep position size small too, you don't want to get larger than 5% of Average Daily Volume. So if it trades, 50K shares a day, most you take is 2500 shares. Even if that is below your calculated position size.
thx for the additional comments
Posted by matt on 23rd of May 2018 at 11:58 am
thx for the additional comments
since you know where your
Posted by matt on 22nd of May 2018 at 11:32 am
since you know where your order is, you pre-determine the # of shares you buy. It doesn't matter if your fill various by a few pennies.
yes over time you adjust stops - I tend to adjust stops once a day at times, it's like a job, look at the open positions at night, look at the chart, if you see stop can be adjusted, then edit the active stop order. it's just something you do once a day like a choir, like 10 - 15 min. I'll discuss more once I get back from Disney Land, which I'm going later this week with the family, I have too much active this week go launch any services like that, which is why I will wait until I get back