Stocks & Commodities V. 25:9 (44-45): How Much Money Should You Allocate? by Torbjorn Iwarson
Product Description
How Much Money Should You Allocate? by Torbjorn Iwarson
If this question is niggling at you, consider how risk-averse you are. That may give you the answer you’re looking for.
Trying to figure out how much money you should allocate to your trading is a difficult task. How risk-aversive are you? To get the answer, I will look at the traditional stocks and bonds and a trendfollowing method applied to gold, EUR/USD, and the Standard & Poor’s 500, covering different asset classes.
THE TRADING SYSTEM
I use point & figure for the signals, using 2% sized boxes and three-box reversals. Point & figure was the first method I learned 20 years ago and I have found it mimics the way most professional traders think if they are not using some other system.
Using this method on your own trading strategies, you can back-test how much you should allocate to your trading strategy and how much you should keep in other assets such as stocks and bonds.
If this question is niggling at you, consider how risk-averse you are. That may give you the answer you’re looking for.
Trying to figure out how much money you should allocate to your trading is a difficult task. How risk-aversive are you? To get the answer, I will look at the traditional stocks and bonds and a trendfollowing method applied to gold, EUR/USD, and the Standard & Poor’s 500, covering different asset classes.
THE TRADING SYSTEM
I use point & figure for the signals, using 2% sized boxes and three-box reversals. Point & figure was the first method I learned 20 years ago and I have found it mimics the way most professional traders think if they are not using some other system.
Using this method on your own trading strategies, you can back-test how much you should allocate to your trading strategy and how much you should keep in other assets such as stocks and bonds.
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