Trading large position size (percentage of equity)

Newc2 · Dec 31, 2017

rvince99 said:
<<you mean reverse engineer a financial target (requirement) eg $5m by age 60? and then take that into designing and trading a system accordingly including factors such as position size and expectancy? >>

That's one way to do it I suppose. Again, it depends entirely on what you are trying to do - and there are as many "criteria" as there are people I suppose, and a criterion can have one (e.g. "Make as much money as possible in 2018, all else be damned!") or many facets ("Make 10% in 2018, without exceeding a 20% drawdown, without paying more than 6% to create such a hedge, and keeping within a Sharpe ratio of X, with no more than 10% exposure to any one sector...andd yah balh blah ybbidt blibbidy").

It ALL depends on what you are trying to accomplish, and that includes not having an open-ended time frame.

And once someone defines their criteria specifically, like this, that is what dictates not only their money management, but their trading as well.

I know it sounds dry, plain, boring, pedestrian, as sexy as sweat sock and not worth anyone's time to do. The rejection of doing this, at the outset, however, is indicative of how serious someone really is about tradin OR if they are like the guy at the casino with his life savings who thinks he is there to make money, but, actually, is there for just expensive entertainment.

And having a criteria, and the degree to which is is specified, I have found to be the biggest determinant to success or failure at any of this.
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Most interesting post. I had not even considered this. Usually what I have read is to just follow the process and the market will give whatever it does but never have I thought of planning and defining my trading system as per defined needs or wants.
Thanks again

Dan4455 · Jan 10, 2018

Newc2 said:
When I trade small and risk 1 to 2% per trade (on daily chart)I get bored and cannot handle tracking multiple positions for bigger moves. Everything seems to move in slow motion and so I exit early out of frustration

When I break the text book rules and trade over 50% on a stock and hold for a couple of days, I consistently make good money most days ( with a stop below entry candle). My logic being is in an uptrend with a 60% win rate, how far can a position move against me ie. not far at all)

When I go back to small position sizing I revert back to small profits and meaningless trading.

What's going on? Am I wired backwards and destined for continued success by trading large? Or are the textbooks right and I am due for a big fall?

This has been my observation for a couple of years. I try to trade like the masses are told but only sabotage myself.

My logic is to hold for a shorter period so emotion has less time to mess with my trade.
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Good question. I have traded my entire account on one position and been lucky, other times punished severely. I always regret not getting out sooner than I did when I had a loser. Using stops EVERY SINGLE TIME (ie discipline, plan)would have saved me many times. I was greedy. Making money> not losing money> losing money. "the quick and the dead" . which one are you? The best trade I made was holding a good company for a while. For me it was facebook, still in it after buying around 75. But that is investing not trading.

InTheMaking · Jan 20, 2018

Newc2 said:
When I trade small and risk 1 to 2% per trade (on daily chart)I get bored and cannot handle tracking multiple positions for bigger moves. Everything seems to move in slow motion and so I exit early out of frustration

When I break the text book rules and trade over 50% on a stock and hold for a couple of days, I consistently make good money most days ( with a stop below entry candle). My logic being is in an uptrend with a 60% win rate, how far can a position move against me ie. not far at all)
More...

One suggestion is to trade multiple strategies; Non-correlated strategies on preferably non-correlated underlyings. I usually trade 6 to 7 strategies on 40 underlyings. So overall it works to around 20 to 25 non-correlated strategies. Some work short-term (2-3 days), some medium term (2 to 3 weeks), some long term (3 to 6 months) and some really long term (2 to 3 years). Allocation is split across all these strategies, depending on my capital growth and income needs. This way, I feel comfortable deploying 70% of my working capital on various trading. However, at a time, only 2 to 3% of my capital is allocated to a given trading strategy.

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Trading large position size (percentage of equity)

Newc2

Dan4455

InTheMaking