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Just some large companies make semiconductors; they are well positioned to enjoy substantial profits.



What drives the very huge R-numerous losses in many cases is often a really tight stop-loss. In the event you’re using a tight stop-loss and you get a spot down or a niche against your position, you run the risk of getting large R-numerous losses.

The fact is, a -five R-many trade that existed in the past could come back and Chunk you within the future. Make sure that the risk-for each-trade you take on takes into account the worst trade in your backtest.

Great question – Indeed Totally stop loss width is usually a ‘rule’ in your system like any other and you may very the value with the width in the initial stop loss to find the best values with the system. Your stop loss is likely to be a percentage based stop, in which case you may start at say 5% and increase it to fifty% in steps of 5% to discover how the system performs as you widen the stop.



on March 12, 2024 at seven:49 am Hi Adrian, That was a very interesting article. I used a 3ATR stop for some time but found I used to be often stopped out too early in the trade. I liked your discussion around the worst single trade during the back test as well as the fact that you need to become confident that the system can survive and still profit if this trade arose at some point inside the future.

If your stop loss is that close to price and you are risking one% of your account there is actually a significant risk of the position gapping through your stop and causing you a very large loss that could threaten the survival of your you can try this out account. From what I have seen stop losses that tight lead to your high percentage of losing trades and with many strategies you could actually make more money by widening your stop and taking smaller (and therefore less risky) positions.

Furthermore, as part in the process of increasing the position sizing, many also fail to identify the proper position size for their trading needs. In fact, determining position size To optimize returns is a big challenge, even with the most experienced traders, that largely is determined by the particular investment size you wish to take.

Now I know I'm able to use a percent volatility to calculate my position size! I hadn’t heard about it before reading your article. Thank you.


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Permit’s talk about how and why I exploit different position sizing models in my systems. This is usually a helpful discussion simply because I want you thinking about the best way to best assemble your portfolio of trading systems plus the upsides and downsides of different position sizing models for each type of system.


The road to the successful trading career is different for everyone, however there’s a single thing that every trader must face at some point – to scale up position size. And that is among the most challenging, nerve-wracking steps many traders (like myself) struggle with. 

Large drawdowns are particularly Terrifying when you’re learning stock trading, so this is something you’ll choose to understand!

For the trend following system with a wide initial stop-loss, percent risk position sizing is quite good. The percent volatility and percent of equity position sizing model are helpful when you don’t have a stop-loss and wish to normalize your account’s movements.

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