Today it's all about Position Sizing Strategies and Risk Control. 👇👇Learn More About The Nasdaq All Stars Systems here:👇👇
By the time we arrive to position sizing, the idea is to be very close to execution. It has
traveled through each area of market analysis (macro, fundamentals, technical) and
the best expression of the idea has been identified.
We know at this point we want to go short or long asset X but how much of it? 1000
shares? 5000 shares?
Position sizing ranks up with there with the least understood parts of the trading and
investing process yet it is not possible to be profitable in the long term without correct
position sizing. Position size has drastic effects on bottom line results, causing profitable systems to fail. It also is a key driver of an investor’s emotions and psychology.
For example, betting too large can cause a fund with a positive EV process to go belly up if they hit a bad string of losers. It is a mathematical certainty that betting too large causes bankruptcy, even for a system that has positive edge.
At Macro Ops, we have adopted bet size parameters from proven veteran managers to
ensure we never bet too large, ever. We ensure our longevity and preservation through
position sizing. Let that sink in. The most important factor contributing to longevity and
preservation is NOT the analysis but the position sizing. This is not an opinion either,
this is cold hard math proving the fact. Longevity and preservation CANNOT be
achieved without adopting, utilizing, and executing a trading process with sound position
sizing rules.
***All content, opinions, and commentary by Fallible is intended for general information and educational purposes only, NOT INVESTMENT ADVICE.
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