Position sizing is that portion of your trading system that tells you how many or how much. How many units of your investment should you put on at a given time? How much risk should you be willing to take?
Aside from your personal psychological issues, this is the most critical concept you need to tackle as a trader or investor. Please you cannot limit yourself this approach doesnt have anything to do with making an intelligent choice, selecting the one best mover and betting as much as you can when you have as close to a lock on something as possible. For further insight Ill refer you to chapter three (Take monumental risks) of How to be a billionaire: Precisely because so many people are able to take this kind of risk, the rewards are not astronomical. No one has a 10-figure net worth purely through passive investing in the stock market. In March of 1989 Steven Ballmer bought $46 million of Microsoft stock (he was then an executive, now CEO) and three years later his investment was worth $350 million. A company gets cheap for good reason and rebounds in value only if somebody, or some change in conditions, fixes the problem.
