BO45: Should You Adjust Your Position Size During A Trade?

Top Traders Unplugged

Niels Kaastrup-Larsen

Business, Business News, Investing, News

4.8 • 670 Ratings

🗓️ 27 March 2020

⏱️ 4 minutes

🔗️ Recording | iTunes | RSS

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Summary

Is increasing or reducing an existing position during a trade, something you should do?

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Transcript

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0:00.0	It's for Moritz, at least to begin with, and I'm sure it will translate into you, Jerry.
0:07.4	It says here, Moritz, you mentioned a couple of times that, and he's paraphrasing over the past
0:12.2	week, I haven't made any changes to position size.
0:15.2	If you're willing to share this information, are you implying that while you are in a trade,
0:19.9	you may add to a position based
0:22.0	on some measure of volatility, for example. I realize that the turtle rules, I realize that the turtle
0:28.3	had rules to add to their initial positions and would love to hear you discuss whether adding
0:35.8	to an existing position is something that is still commonly done.
0:42.0	Yeah, so maybe, Moritz, you want to talk a little bit about it.
0:45.4	And, Jared, if you want to add anything.
0:50.8	Yeah, from what I understood, I mean, the way that I like to do that is to take a position.
0:59.6	And at the time of position entry, that position will get a certain size.
1:04.1	As far as I'm concerned, that's a function of historical volatility or average true range.
1:10.1	Right.
1:10.9	And then over time, that position may develop, for instance, you know, say you have a long
1:18.6	position initiated and, you know, you may add to that long position because the market
1:24.1	continues to make new highs as is one example, right?
1:28.2	And again, when those, you know, new signals are hit, again, you know,
1:35.5	there's a position size calculated and ideally I'd like to just, you know, keep that size
1:40.4	on until the trade hits a stop.
1:45.0	Now that, what that then does is that I don't have any of that vault controlling taking place in between,
1:56.0	which is kind of like you know that their overlay to the system that doesn't really have to do anything with,
	...

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