Position sizing could very well be the most important aspect of a trading system, yet, like expectancy, it’s rarely covered in trading books. A position sizing model simply tells you ‘how much’ or ‘how big’ of a position to take. Position sizing can be the key factor in whether or not you stay in the game or whether your gains are huge or minimal.
Here are some position sizing resources:
- Van Tharp’s books are by far the best work I’ve seen on position sizing, expectancy and money management. I’ve read “Trade Your Way to Financial Freedom” and “Financial Freedom Through Electronic Day Trading” and recommend both highly.
- Money Management or Position Sizing or Bet Size… No Matter What You Call It, Better Know It
- Michael Taylor on his position sizing trials.
- Stephen Vita on his position sizing model.
- Jon Tait’s argument for trading many small positions. (I don’t necessarily agree with Jon’s conclusion but he covers some important topics in this post.)
- Position Sizing: Why Size Matters to All Investing Greats
- TradersCALM – Introduction to Position Sizing
- Position Sizing – The Most Powerful Investment Concept
- Size Really Does Matter! Position-Sizing Management Can Make a Difference Between Profit and Loss – (Free subscription required)
- T.I.P.S. – Trading is Position Sizing
- My position sizing spreadsheet
- TradeStars’ position sizing calculator
- Dave Laplander’s position sizing calulators