My approach on Position Sizing

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 MY APPROACH ON POSITION SIZING

• Reference
• https//www.platinumtradingacademy.com/

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Index

• My Approach On Position Sizing
• Risk Vs Position Sizing
• Flash Trades
• Radar Trades
• Fundamental Trades
• Other Data

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My Approach On Position Sizing

• Over the past week, I was asked a few questions
  about my trading thoughts and my position
  regarding the sizing of the trades that I place
  with the PREMIUM SERVICE.
• I promised that I would address this matter via
  this weeks blog so below I supply my general
  thoughts on how I approach position sizing.

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• 1. I have three types of trade
• 1. FLASH
• 2. RADAR
• 3. FUNDAMENTAL.
• 2. There are three sizes of lots available
  MICRO, MINI and STANDARD. 
• 3. There are a few types of currency pairs in my
  eyes
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• USD major EUR/USD, GBP/USD, USD/JPY and
  USD/CHF.

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• Major commodity pairs AUD/USD, NZD/USD and
  USD/CAD.
• Minor commodity pairs USD/NOK and USD/MXN
• Cross-Rates EUR/GBP, EUR/JPY, GBP/CHF, AUD/CHF,
  NZD/CHF and AUD/NZD.
• Commodity cross-rates EUR/AUD, GBP/AUD,
  EUR/NZD, GBP/NZD, EUR/CAD and GBP/CAD.
• JPY pairs AUD/JPY, CAD/JPY, CHF/JPY, GBP/JPY
  and NZD/JPY.

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• Others USD/SEK, AUD/CAD, SEK/JPY, EUR/SEK, and
  EUR/NOK Obviously there are hundreds of currency
  pairs but those listed are the ones that interest
  me and form the basis of my Forex trading broker
  accounts.

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• I approach each category listed above by RISK
  MANAGEMENT and RISK TOLERANCE.
• This is based upon the broker account used.
• Inside the EDUCATION tab of the PREMIUM SERVICE
  there are a couple of articles about why I trade
  with multiple brokers, these articles should also
  be read to get a wider understanding of my
  approach.

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Risk Vs Position Sizing

• The maximum that I will risk is about 3 of my
  broker account balance in total for all active
  live trades.
• Many of you have already stated that you see this
  as too low.
• From my perspective it is the only way to give
  you longevity in trading.

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• The Forex market takes no prisoners, if you are
  not boxing clever you will get wiped out
  eventually unless you trade with disciplines.
• This is an overview, a macro level view, of my
  approach to position sizing.

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Flash Trades

• USD MAJORS MAJOR COMMODITY PAIRS usually MINI
  or STANDARD LOT TRADES, but never close to the 3
  limit to allow me flexibility to add or reduce
  the position size/exposure.

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• FLASH TRADES would in 99 of cases not be done on
  other categories of currency pairs unless after a
  news breaking data release.
• These trades would be MICRO or MINI lot trades,
  maximum of 0.5 RISK per trade.
• These are small trades most of the time.

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Radar Trades

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• All currency pairs are entertained and risks are
  limited.
• I will risk maybe 0.5-0.75 if pushed (my
  TRADING PLAN says 1 but this is for extreme
  circumstances) on USD majors, JPY pairs, Major
  Commodity Pairs and between 0.4 - 0.5 on the
  rest.

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• A mixture of MINI, MICRO and STANDARD lots are
  used.
• Do not be surprised when I tell you that for some
  of the more exotic pairs my trade size to get me
  started can be just 4/5 MICRO LOTS.

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Fundamental Trades

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• These types of trades are usually reserved for
  the commodity crosses.
• I have had real identity issues with this
  category in 2014.
• These trades are all limited to just one of my
  brokers.

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Other Data

• As a general rule STANDARD LOTS are only used
  for USD related currency pairs plus the EUR/GBP
  and EUR/JPY.
• So to recap, even though I have my 0.5 limit on
  a trade I DO NOT max out on a position / trade
  size every time.

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• I will add to trades and reduce trade sizes
  before Fibonacci levels, pivot points or simple
  previously noted heavily used horizontal
  supports.
• With JPY pairs when I used to trade them quite
  frequently, round numbers would do either at 50
  or 100 levels.
• For the exotic pairs I tend not to add or reduce
  sizing too much, most of my playing with sizing
  is due to risk.

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• STANDARD LOT trading attracts more risk than
  MICRO LOT trading, hence the reason I am always
  looking to add to or reduce my RISK EXPOSURE.
• Conversely, that's why I also tend to let MICRO
  lots either work or not work out.

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• When entering a trade where I want to have say a
  STANDARD LOT size, I may just start with 2-5 x
  MINI lots and add as the trade takes momentum in
  the direction that I want.
• This allows me to have an initial wider stop in
  place that I can tighten later as I add to the
  trade size.

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• It is not rocket science but it does take
  practice.
• Knowing the maximum risk per trade per broker
  account is the first thing and from then on its
  plain sailing.

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• Let me reiterate, its all about RISK MANAGEMENT.
• You can be speculative to a point, but at the end
  of the day longevity in trading emanates from
  being savvy and limiting RISK EXPOSURE along with
  chart analysis and identifying chart high
  probability patterns.

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Thank You