Get to grips with long positions, short positions, and how to establish a position size that is commensurate with potential opportunities and your own tolerance for losses.
Strategy, Planning and Risk Management
When you build a trading strategy, a lot of time and consideration has to be given to essentials:
- Which asset class to trade,
- Whether to buy or sell that market
- At what price to enter the trade
- What a sensible target level is
- Where to place a stop
Cutting across all of these is the essential issue of risk management.
Position sizing is an important technique to control it.