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Strategies & Market Trends : Strictly Buy and Sell Set Ups

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To: chowder who wrote (2055)1/31/2005 9:00:39 PM
From: Bob V  Read Replies (1) of 13449
 
I am going to increase the percentage of money per trade.

To what percent of the total portfolio?

I try to risk less than 1% of my portfolio on any one trade. So where I place my stop determines the number of shares I buy.

with a $10,000 portfolio 1% = $100

If my stop is $1.00 under my purchase price I can buy 100 shares. If it is 50 Cents away I can buy 200. If I'm buying a 20 dollar stock I might have $2000 invested in a position However if I'm trading a fifty dollar stock I might have 1/2 the portfolio involved.

I allow my self to use 50% margin. That is I'll borrow up to 50% of the portfolio. I limit any one position to 33% of the portfolio and at present I limit myself to a maximum of 5 positions.

As the portfolio grows so will the size of my positions. And if I have a couple of bad months it will keep me in the game a little longer.
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