Comment on Mr Consistent returning incredible returns
commented on
15 Jan 2014, 03:40 PM
Karuna,
My theory is pretty simple. I don’t care about the point difference between entry and SL.
Lets say Acct size = 7L, number of lots traded = 5, sl = 40 pts away. So, money wise, i am risking Rs.10000. So, i am risking approx. 1.5% of my account.
But in another trade, lets say my stop is 70 pts away..i am willing to risk only 1.5% of my account which is Rs.10500. So number of lots i would trade here = 3 lots only as 3 lots would amount to approx Rs.10500 of money value at risk.
Thats why i said in some other post that i take all my trades and adjust my position size accordingly. This can be done only if you trade multiple lots..if you trade less than 3 lots, then implementing this position sizing will be an issue.
Hope it helps.