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MONEY MANAGEMENT

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MONEY MANAGEMENT   Although the idea of money management to me is one of the most important aspects of trading, it is surprisingly how little it is discussed in many trading forums. My idea of money management is being able to keep losses small no matter how much money is being placed into the trade. Some traders tend to think in terms of lot size per trade, while others tend to think more in percentage terms. Let’s look at each issue separately, as I feel both have their merits depending on what style of trading you have. First, let’s discuss the share lot size. Many traders, as they become efficient with their trading executions, look to increase their size position into the trade. This share size tends to not change with respect to stock price, meaning that traders will trade 1,000 shares whether the stock is $2 a share or $100 a share. Obviously, the comfort level of trading 1,000 shares will come in time to newer traders, while an experienced trader will th