In this lesson, you'll learn how to apply stock risk management in your trading so you never blow up a trading account.
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#4: Technical Analysis Secrets: https://www.youtube.com/watch?v=rNI166nMAFw
#5 MACD Indicator Secrets: https://www.youtube.com/watch?v=eob4wv2v--k
Tradingview, Papertrade account. In the long position tool, my quantity displayed on the tool appears in 9-10 digit numbers. Is this a problem? How do I convert this to lot size, do I divide the entire 9-10 digit number by 10,000?
wait – isn't this an example of a 20% drawdown? Isn't that really high? I thought you want a max 5% drawdown? $100 stock = $95 stop, not $80 for example. thanks
You should do videos being on the charts sharing screen. 👌👍
Thanks Rayner. Really like the ways and example you always explain.
How about cost trade???
I don't know if Rayner monitors comments, so I'll ask this question for Rayner and for the group. I notice that when I set the risk at 1%, the position size is usually 25%-50% of my account value. Do y'all throw that high a percentage into one trade, or do you have a maximum (i.e., maximum of x% of the account per trade)? I've been doing max 10% of my account per trade. but that is honestly a fairly random limit. Just wanted to get some thoughts about that. Thanks, to anyone who weighs in on this!
Divide your capital by your down side risk (stop) indicated as % to give you your position size for the trade. If the down side risk, to the stop, is 3% then divide $100,000 by 3. (assuming your have set your risk at 1% of capital. If down side risk is 7% then divide $100,000 by 7 for your position size. Easy calculation.
yo, John cannot LOSE all money after 2 loses. Because John has stop loss. And thats not a joke from me. Looks like ur 'theory' crashes from the beginning.
So, lets assume he lose 4% as a max of 50% (as stop loss). And after 2 losing trades(out by stoploss) he has like.. 96k on account. And even less if he use 50% of account every time. That means that after 1 trade he will have 98 (4% lose from 50k)
and his 2nd trade will be for 49k as 50% of his NEW account balance.
WTF. Why every 'guru' on utube gives this SUPER UNFINISHED example
Hi rayner bro, could you share this google doc or make a video on how you set this position sizing spreadsheet up pls
Everytime she loses her account will have less capital, so her 1 percent is less than it was the first time. Same with the John example. he wouldnt los his account in two trades, hed only lose 25k on the second trade
do you put your full account in one trade?
this was very helpful. thanks for the video!
I still don't get the # of shares. If your buy price is 100 and it's telling you 50 shares isn't that going over your risk of 1% since 50 shares at $100 each = $5000. Yet your risk is $1000?
In my 5 years of trying to learn how to trade, You are thr 1st one who I met that breaks down information simply and cleaely. You are a teacher
Well explained
Pls I want to know when we are calculating for position size is our answer in unit or dollar?
Interesting…I am not a trader but thought John would be in much better shape if he used the stop loss correctly…win big and lose small…depends on the real outcomes of coin flip sequence. The probability is 50% win and 50% loss over a long sample. If the winners are bigger than the losers then John might retire early.
When we get qty according to our stop loss price some times qty × stock price is greater than capital?
What to do in that case?
wow finally found someone to explain this so that I could understand, thanks
Excellent info on calculating risk management and how many shares to buy. I made a similar spreadsheet but yours was better in showing the difference it makes in number of shares versus stop loss level.
Thanks!
Hi Rayner.
Do you have an excel formula for Position Sizing Calculator for Stocks so I can have it done just like yours? Thank you!
Sorry to all Johns out there
Mann! really helpful😃
Great videos, thank you for sharing your knowledge and experience! Very good explanations and easier to understand compared to other videos I have seen.
This is applicable for only one particular trade
What if we take 5 trades a day
how can I setup this calculator
📈 great video
I’m having trouble with the long position sizing tool. I don’t trade Forex and yet the tool defaults to a “Lot Size” of 1 and shows me incorrect quantities to buy.
For example, let’s say I enter:
Account size 10k
Risk size 2%
Entry at $1.05
Stop at $1.03
The position sizing tool tells me to buy 9,756.098 QTY. That can’t be right. That’s more than my account balance. And it always does this. And there’s no way to get rid of the “Lot Size” field or set it to zero.
Any solutions you can think of?
dude, im not sure if youre going to read this , but thank you a lot!!!!!!!!!!! im just reading your guide, thanks for bringing such a good content for us for free. being honest, youre the best pal!
Thank you, this was very helpful!
we wouldn't have made it without you rayner !!