Comments on: Position Size to Determine How Many Shares to Buy http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/ Sat, 06 Mar 2010 08:23:43 -0800 http://wordpress.org/?v=2.8.2 hourly 1 By: Mike http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/comment-page-1/#comment-21498 Mike Tue, 20 Oct 2009 21:19:32 +0000 http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/#comment-21498 Hi, Tharp has come out with a new book called Definitive Guide to Position Sizing. He uses a trade simulator to optimize position size based on the desired objective (e.g. 100% profit) and the trader's personal definition of ruin (e.g. 33% loss of initial equity). You can use an equivalent position size simulator at http://www.afltools.com/positionsize.html to plug in your own objective/ruin for many of the examples in the book. It can be a real eye opener! Hi,

Tharp has come out with a new book called Definitive Guide to Position Sizing. He uses a trade simulator to optimize position size based on the desired objective (e.g. 100% profit) and the trader’s personal definition of ruin (e.g. 33% loss of initial equity).

You can use an equivalent position size simulator at http://www.afltools.com/positionsize.html to plug in your own objective/ruin for many of the examples in the book.

It can be a real eye opener!

]]> By: Chris http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/comment-page-1/#comment-20415 Chris Wed, 10 Dec 2008 03:46:54 +0000 http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/#comment-20415 Terry, For educational/ example purposes - that's the only reason. Terry,
For educational/ example purposes – that’s the only reason.

]]> By: Terry Sandbek http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/comment-page-1/#comment-20414 Terry Sandbek Wed, 10 Dec 2008 03:44:26 +0000 http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/#comment-20414 In the above example how an why did you pick 5%, 10% and 15% sell stops? In the above example how an why did you pick 5%, 10% and 15% sell stops?

]]> By: neil miller http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/comment-page-1/#comment-17677 neil miller Fri, 11 Apr 2008 07:21:17 +0000 http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/#comment-17677 When I sell maybe I'm wrong? If stock costs £3 buy £9000 = 3000 shares. Say up to £4 sell about 700 taking the profit. left with 2300 shares. Profit taken = £2800. That's if stay the same. If they go up sell difference on price. Moves to 4.5 sell .5. You keep shares in case of large rise or if they drop you still have taken cash out. Clear? as mud. neil UK When I sell maybe I’m wrong? If stock costs £3 buy £9000 = 3000 shares. Say up to £4 sell about 700 taking the profit. left with 2300 shares. Profit taken = £2800. That’s if stay the same. If they go up sell difference on price. Moves to 4.5 sell .5. You keep shares in case of large rise or if they drop you still have taken cash out. Clear? as mud. neil UK

]]> By: Neil http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/comment-page-1/#comment-16108 Neil Sun, 20 Jan 2008 07:01:00 +0000 http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/#comment-16108 Hey Chris, nice post and great blog! You mentioned that position sizing is tricky under 10k. Is it possible/advisable to use position sizing for a non-margin account that is under 5k? Thanks. Hey Chris, nice post and great blog!

You mentioned that position sizing is tricky under 10k. Is it possible/advisable to use position sizing for a non-margin account that is under 5k?

Thanks.

]]> By: Afraid to Trade.com Blog - Overcoming Stock Market Fears » Link: Position Sizing and Shares to Buy http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/comment-page-1/#comment-16103 Afraid to Trade.com Blog - Overcoming Stock Market Fears » Link: Position Sizing and Shares to Buy Sun, 20 Jan 2008 01:04:13 +0000 http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/#comment-16103 [...] Chris Perruna recently posted a quick article including various examples in his post “Position Sizing:  Determining the Number of Shares to Buy.” [...] [...] Chris Perruna recently posted a quick article including various examples in his post “Position Sizing:  Determining the Number of Shares to Buy.” [...]

]]> By: Henrik http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/comment-page-1/#comment-16093 Henrik Sat, 19 Jan 2008 14:13:36 +0000 http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/#comment-16093 Hello, Chris. Thanks for the article. Something similar is also available in your portfolio spreadsheet, which is also very cool. I was only wondering why is the Exit Share Price included? Oh, and I also wanted to ask you, if you delete your positions from the Portfolio Spreadsheet after you sell them or do you leave them in? Thanks. Hello, Chris. Thanks for the article. Something similar is also available in your portfolio spreadsheet, which is also very cool. I was only wondering why is the Exit Share Price included? Oh, and I also wanted to ask you, if you delete your positions from the Portfolio Spreadsheet after you sell them or do you leave them in? Thanks.

]]> By: Link Love Friday | A Trade A Day http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/comment-page-1/#comment-16082 Link Love Friday | A Trade A Day Fri, 18 Jan 2008 07:02:23 +0000 http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/#comment-16082 [...] Chris share’s a few scenarios to teach us How Many Shares to Buy. [...] [...] Chris share’s a few scenarios to teach us How Many Shares to Buy. [...]

]]> By: Mike M http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/comment-page-1/#comment-16036 Mike M Tue, 15 Jan 2008 21:52:19 +0000 http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/#comment-16036 Excellent examples. A clearer way (I believe) of calculating the number of shares is: 1. 5% stop loss on XYZ share of $60 is $3 2. Max risk on $100,000 account is 2% or $2000 3. No of shares is $2000 / $3 = 667 shares Excellent examples. A clearer way (I believe) of calculating the number of shares is:

1. 5% stop loss on XYZ share of $60 is $3

2. Max risk on $100,000 account is 2% or $2000

3. No of shares is $2000 / $3 = 667 shares

]]> By: Suzanne of Pittsburgh Options Trader http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/comment-page-1/#comment-16033 Suzanne of Pittsburgh Options Trader Tue, 15 Jan 2008 18:17:29 +0000 http://www.chrisperruna.com/2008/01/15/position-size-to-determine-how-many-shares-to-buy/#comment-16033 Hi, thanks for the examples, I am in the middle of this book and it's a great read. My account started at only $5000 (that's what I had), but I still emply this with options trading which usually lets me purchase one contract of between $100-$200. My recent post on VIP goes through that process for a current position. Hi, thanks for the examples, I am in the middle of this book and it’s a great read. My account started at only $5000 (that’s what I had), but I still emply this with options trading which usually lets me purchase one contract of between $100-$200. My recent post on VIP goes through that process for a current position.

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