Money management, risk management, risk control, position sizing – whatever you want to call it — matters and matters tremendously. In fact, position sizing alone can make the difference between success and failure in the investing and trading business.
Position sizing is the answer to the question of how much. How many shares should I buy in relation to the size of my account and my risk tolerance? How many contracts or options? What is the correct size for my position?
How important is position sizing? It’s just about the most important thing there is in investing and trading. Continue reading »