OK, maybe position sizing isn’t sexy, but it’s certainly an underrated topic that a lot of traders get wrong. (For a real-life example, see this message I sent to the list a few months ago.)
In this week’s episode of Line Your Own Pockets, we discuss all the position sizing techniques I’ve used in my strategies. Michael was shocked to hear I use constant sizing in a couple of my models, but despite his skepticism, I can assure you there’s a good reason for it.
We discuss different sizing approaches:
- Constant shares
- Constant dollars
- Percentage of account
- Sizing by volatility (ATR, for example)
- R-Multiple approach (sizing on distance to stop)
- Kelly criterion
- Martingale
And much more.
