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Great site Kenny.

Technical Analysis written in a straightforward way so that everyone understands.

There's only a small few who get it consistantly correct and you are certainly in that group. Chris

Thanks for putting this all together and sharing! BHW

Awesome Stuff! Kenny has shown time and time again the ability to show us direction in these markets. Khalsa

Kenny, I appreciate your insight and analysis. You make sense of what I can rarely see.

Thanks for sharing.

Took a gold short at 1240 just closed at 1203 :-)))))))))))))))))) ........ top call!!  Gekko

Trading Position Size Guide

Learn Stock Market Trading Money Management

Trading Position Size

Getting the trading position size correct is a key element of a stock market Trading Money Management System. It can make or break a perfectly good trading strategy and if the sizing of a trading position is not correctly applied, it can potentially cause lasting destructive issues for the trader.

Most new traders are inclined to trade too heavily in proportion to the amount of trading capital that is available to them. They may even start off with small trades but are very likely to let these get out of control either through over confidence or chasing initial losses that have been incurred.

Why is the Size of Trading Positions So Important

Why are the levels of trade sizes so important?

If Trade Size is Too Small  -  In the case where this is too conservative, a trader will never make any significant gains and boredom can set in, leading the trader to becoming complacent and careless about where he enters a trade.  Even if the losses are small, these can mount up into a significant proportion of a traders capital.

If Trade Size is Too Large  -  When this is set too high, a small number of losing trades can lead to a disproportionate sized loss in a traders account. This can then begin to affect a traders ability to view any trade in an effective and impassive manner as emotions begin to cloud the traders judgment.

Fear of losing even more capital can lead to the closing a trade at exactly the wrong moment. The traders new found tendency to focus on the negatives causes indecision, resulting in additional losses and smaller gains as winning trades are cut short. 

This can lead to significant and long term issues for a trader if it continues and it is at this point that most new stock market traders give up and throw in the towel having lost most, if not all of their initial trading investment.

Traders Day Trading Position Size Calculator

Traders Day Trading have created a Trading Money Management excel worksheet that incorporates a built in trading position size calculator to help anyone learn how to develop a level of trading size that they are comfortable with for their individual style of trading. 

There are a few variables that must be entered into the calculator

  • Total Portfolio Value
  • Maximum % loss of capital that can be risked
  • Trade entry price
  • Stop Loss level
  • Profit target price
The calculator will then automatically display the maximum size of position that should be entered to maintain the level of risk that the trader is prepared to accept on that trade. The Position Size Calculator also calculates the potential profit as well as the potential loss for that trade allowing the trader can compare at a glance, how much is risked to how much the expected gain.

Initially, we are making our stock market Trading Money Management worksheet available through our Free subscription based mailing list, but it will be made available more widely at some point in the future. Meantime it can be accessed completely free through our Ezine subscription and via the link just below.


Free Excel Trading and Investment Money Management Worksheet with Trading Position Size Calculator

Learn Successful Trading Money Management Systems with our
free excel money management position size worksheet.
The easy to use worksheet is for planning trading position size in stock market trading and investment strategies with Stocks and Shares, Forex, Commodities and Futures, Options and CFDs and will help anyone to learn about trade position sizing in Money Management strategies.

Download the Traders Day Trading
Money Management Worksheet
Free Position Size Calculator

Learn more about Position Sizing and stock market Trading Money Management Systems 

Trading Money Management Books - Van Tharp Books

Van Tharp is a leading trading coach that has written 3 acclaimed books on the topic of trading psychology and trading money management systems, of which, the Super Trader Expanded edition is his latest.


"Using the lessons of Super Trader, you will approach trading as you would a small business - realistically, systematically, and enthusiastically. Drawing on his decades of experience, Van Tharp has created a simple plan designed to help anyone master the market. You can put this plan to use immediately in order to...

  • Master the psychology of trading
  • Craft a 'business plan' -- a working document to guide your trading Develop a trading system tailored for your personal needs and skills
  • Create position-sizing strategies to meet your objectives
  • Monitor yourself constantly to minimize mistakes

Throughout the book, Van Tharp asks the pertinent questions you must ask yourself about becoming a trader, being a trader, and succeeding as a trader.

The rewards that come with being a Super Trader--both financial and personal--make you feel as if you can leap small buildings in a single bound. Whatever your skill level, Van Tharp provides the formula for succeeding in a field where most people fail.

Learn more about Position Sizing and stock market trading money management

Learn Stock Market Trading Money Management 

trade position size
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