Sunday, January 13, 2013

Trading Size

What should be your ideal trading size?

There is no standard answer when you are trying to trade shares and stocks. It depends on how much experience you have trading the markets, your education level (trading related), the product you are trying to trade, and so on. In short, this cannot be generalized. But here are some guidelines that you can try to follow:
  • Never trade the markets directly. It is a surefire recipe for disaster. Not only will you lose all your money, your ego may tell that you will improve, thus hastening the loss making cycle, which only gets worse as you lose confidence (reason: most beginners keep increasing size to make up for lost money).
  • Try to spend at least 6 months under an expert's glare. Trade paper money and carefully analyze performance with your guide
  • Start trading real money only when you are getting good results. Even this is not a guarantee. Oftentimes, paper trading results are manipulated!