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Entry Strategies and Position Size

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FIGURE 6.18 Position Size for Long Google Position

position size is the maximum capital exposure allowed for the available account capital divided by the per unit capital exposure. Figure 6.18 is Google daily data. Let’s say you’ve been following Google for a couple of years. You missed buying it at $200, missed again at $300, and missed again at $400. Each time it rallied $100, $200, and more in a matter of weeks or months. Not only are you not going to miss buying Google again after it completes its next correction, but you are going to load up for a big gain to make up for the earlier missed opportunities and to set yourself up for early retirement! As of the last bar on the Google daily chart, if Google just takes out the potential Wave-B swing high, an ABC correction should be complete and off goes Google for another quick $100 to $200 gain. If you have $50,000 of available capital, what is the maximum number of Google shares you can buy with the swing entry strategy to enter above the potential Wave-B swing high with an initial protective sell-stop one tick below the minor swing low at 505.79? The maximum number of shares you can buy is 72! The maximum capital exposure for any one trade is $1,500 ($50,000 × 3 percent). The trade unit capital exposure is $21.05 ($526.83 – $505.78). The maximum number of shares you can buy is $1,500 divided by

Profile for ERIC  Hunt

(wiley trading) robert c miner high probability trading strategies entry to exit tactics for the for  

(wiley trading) robert c miner high probability trading strategies entry to exit tactics for the for  

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