Position sizing is an important aspect of trading. It refers to the percentage of your portfolio that you are willing to risk for a specific trade.
On Anny, you have 2 options:
- Fixed investment -> Invest a fixed portion of your allocation on each trade.
In this method, the risk exposure will fluctuate at every trade.
Entry amount = investment allocation * (Investment recommendation/100)
- Fixed risk -> Fix the risk by calculating the amount to invest based on the stop-loss position.
In this method, the trader's first consideration should be the account risk (a percentage of the allocated investment). Then, determine where to place the Stop-loss of the trade.
Once we have determined these, they can calculate their ideal position size.
Step 1: Investment recommendation = (Risk percent / Stop-loss percent) * 100 Step 2: Entry amount = Allocation * (Investment recommendation/100)
Anny calculates for you. You just define how much is your risk and the Stop loss is taken from the signal.
For example: as per the calculation in step 1 (2/3.94 * 100) you should invest 50.76% of your allocated investment.