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Strategies & Market Trends : Swingtrading - Tricks of the Trade -- Ignore unavailable to you. Want to Upgrade?

To: William W. Dwyer, Jr. who wrote (21)	10/4/1999 10:20:00 AM
From: sammy	Read Replies (1) \| Respond to of 551

Thats a good question William. If you don't mind me taking a shot at it, I think what Brandon's 2% risk management module requires is that not more 2% total of your account is at risk. >>So, doing so would have the trader taking ten positions each with a potential 2% stop loss, therefore a total risk of 20% of the account, $10,000 in this case.>> In this case of a $10,000 account and taking 10 positions, you cannot risk more than $2,000. So, the maximum loss for each position would be $2,000/10 = $200. Hope this helps. sammy

To: William W. Dwyer, Jr. who wrote (21)	10/4/1999 12:59:00 PM
From: Brandon	Read Replies (1) \| Respond to of 551

Bill, Here's the question for you. With your system, your strategies, your money management principles, how many positions do you take at the same time? I suppose this is even more relevant given the possibility of overnight holds during which time one loses control of the trade. If the general market reverses quickly, one could conceivably get stopped out of all the trades very quickly, having substantially more than a 2% total loss. I am comfortable during the day to have up to 5 open positions at one time, though when I do this I will be risking less than 2% on each trade. I like to keep the total risk exposure of my account under 6%, this just keeps me from having psychological problems. On an overnight basis I don't like to have more than 3 open positions, that's about when I start to lose sleep. These will never be "all one way", as I do like to have a hedge. In general I would not think a new trader should have more than 1 or 2 open positions at any time, at least in the first 6 months. Hope this helps. Brandon www.mtrader.com/swingtrade