Portfolio Management Software
Position sizing is a calculation which determines the optimal amount of units to purchase. Position sizing is a little known concept amongst the majority of traders and investors and yet it often has dramatic effects on the overall performance. As an example, it has been statistically proven that a random entry […]
In fixed ratio position sizing the key parameter is the delta. This is the dollar amount of profit per contract to increase the number of contracts by one. A delta of $3,000, for example, means that if you’re currently trading one contract, you need to increase your account equity by […]
The idea behind fixed fractional position sizing is that you base the number of contracts or shares on the risk of the trade. Fixed fractional position sizing is also known as fixed risk position sizing because it risks the same percentage or fraction of account equity on each trade. For […]