I am a swing trader, with retention periods ranging from a few days to several weeks and up to 2-3 years. I trade on intraday and weekly charts. I have been trading stocks, options, futures and trading since 1992. I am also an engineer and certified owner of the Lean Six Sigma belt. This story and training encourage me to constantly improve, which means constant learning and analysis. I think the turning point in my trading career was when I started thinking about all my existing positions, not just where I was going to find the next one. This prompted me to learn more about diversification, risk management, industry analysis and balance sheet, and method analysis. I hope this doesn't sound instructive. getting started It doesn't matter how much you have to trade. You just need to apply intelligent portfolio management, as professionals do. Position size is one of the keys to managing my portfolio. The number of positions and the size of the position are determined by the individual trading risk, the maximum desired portfolio risk and the account size. Understanding and applying these concepts has improved the overall performance of my portfolio.
MY RISK MANAGEMENT RULES Here are my rules: Diversification Work up to a certain number of positions. Many theorists say that the optimal portfolio contains 16 positions or more in many sectors. More than 30-35 positions gain little in the overall diversification. Here's an example: If you start with $1,000, trade 1 or 2 positions. When the balance = 2000 dollars, trade 2 positions. When the balance is $5,000, trade 4 positions. With balance = $10,000, trade 8 positions, balance = $20,000, trade 16, balance = $50,000, trade 30. Keep in mind that there is nothing wrong with starting from the same position, just follow different rules.
Thanks for a well thought analytical post. Unfortunately, I am not a professional, and I can’t understand anything about the topic. When I need to deal with financial issues, I always go to my insolvency litigation solicitor from ndandp.co.uk and ask them for advice. The people who work there have wide knowledge about all the financial processes on the market and can always help me even if my question is not connected to insolvency or something of the kind. They know better than I do, and I trust them because they always somehow manage to help me.