Thursday, May 5, 2022

♟ Does Size Matter? (Position Sizing 101)

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"The objective is to not let one or two - or a dozen - bad trades blow up your entire portfolio so you can survive a bear market."

Karim Rahemtulla, Head Fundamental Tactician, Monument Traders Alliance

Karim Rahemtulla

Position sizing! I talk about it all the time.

But... how do you implement it?

I have shared ideas on how to use it before. But during such a volatile period, I think those ideas bear repeating.

Position sizing is meant to prevent a massive blowup in your portfolio by limiting how much you invest in any one position or with any one strategy. It also covers how to use stop losses to avoid further damage.

Some parts of position sizing - the parts that relate to buying and owning stocks - are one-size-fits-all.

But the guidance for other areas - such as short-term options, LEAPS or put sells - will vary from person to person. Don't worry - you will get a general idea.

CLICK HERE TO LEARN HOW TO POSITION SIZE

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