Risk Management : Position Sizing or All in?
#1
Hi SMP's!

What strategy do you use for your Risk Management in a Bear/Bull/Sideways Market with your allocated capital?

Let us break it down in terms of Invested Capital as follows; (i.e.,)

Capital Portfolio Sizing Allocation Max. Stock Position Cash
P100K 80%??? 2? 20%??
P500K 80%?? 4? 20%
P1M - - -
>P5M - - -

Do you go ALL IN for a particular stock?

I have always used 100% position sizing, zero cash reserved and nowadays allocate only to 4 stocks equally.. I have tried up to 12 maximum stock positions to minimize drawdowns but suffered losses due to wrong timing in the market.Big Grin.. I have tried going ALL in also for 1 stock.. again, wrong timing in the market again..Big Grin I used to be comfortable with 5-8% drawdown before but with dwindling capital, it is not now limited to 2%..Big Grin.. Today, I guess i have settled down my risk appetite and now comfortable with it even with some high flying stocks pass my radar screen.

I hope some people can share their view, specially to those traders who have matured with their risk management style.

thanks in advance.Shy



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#2
kakahiya mag mention ng portfolio size e, andaming big time dito kaya eto nalang. Big Grin

to be honest, i do not know how to "correctly" size your portfolio based on risk/reward potential. assuming you have a stock that has a better risk to reward ratio, how much bigger of a percentage of your portfolio do you allot it? i have no idea.

what i usually do is that i try not to allot more than 20-25% to a particular stock. i also usually keep around 5-10% cash in my stock portfolio at all times so that i do not have to liquidate some stocks when i see something better.

for the really speculative third liner basuras, i try not to allot anything more than 7-8% of my portfolio (usually 5%) so that even if i lose 50% from it, it's not super painful.
buy high, sell higher!

stock market abbreviations (for newbies)
http://www.stockmarketpilipinas.com/post...g#pid11738

"when it comes to trading, i'm just barely smart enough to realize that i'm a total idiot. i might be considered stupid, but on the intelligence scale, it puts me comfortably ahead of all the dumber people who thinks they're better than me."


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#3
(10-19-2011, 08:03 AM)Aulrick Wrote: Hi SMP's!
What strategy do you use for your Risk Management in a Bear/Bull/Sideways Market with your allocated capital?
Do you go ALL IN for a particular stock?
I have always used 100% position sizing, zero cash reserved

Hi,
going all in?
well, wala ng embedded risk management kung ganon.
very risky lalo na kung bago ka pa lang.
wala pako naencounter na Pro trader ng stocks, forex, futures, etc na ganyan ang style.

Professional traders manage risk
Professional traders always try to reduce risk
Professional traders are risk-averse

i wont give u a recommendation other than dont go all in.
iba ang risk profile mo, so u have to find out for yourself kung gano kaliit or laki ang risk mo.

You should make drastic changes sa trading style mo, more specifically sa risk management mo... dahil if u dont, sooner or later, the market will punish u.
wag mo na hintayin mangyari yun
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