Teach Talk Trade Day Trading & Technical Analysis

Here I will talk about risk management in developing an online trading plan.  One area is position sizing.  Yes position sizing, do you hear me POSITION SIZING!  You have heard in real estate, location, location, location, well one mantra in online trading is position sizing.  In working your online trading plan, you will back into this area.  If you plan is realistic in its overall scope, your position size will be determined by  the plan and not some size out of your head.  When your position size is too large relative to your account size, you will engage on an emotional roller coaster.  Your online trading plan will crumble fast.  By limiting your  position size so that you are risking only a small fraction of your online trading portfolio on each trade, you are managing the emotional impact of profit and losses as well as managing your risk.  This is a part of money management also.  Many online traders are under capitalized and trade sizes that are too large for their portfolios.  They do this to generate income, their trading plan is most likely not thought out.  The emotional ups and downs will eat the trader alive, thus causing poor risk management which leads to lossesPlease take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Energy issues ) & The Mechanical Monkey where we discuss our mechanical trades.