@AdityaTodmal 1/ For a faster growth, one needs to have a bigger size: • What difference would it make if a stock moves by 300%? • But then, what if you had only 1% capital allocation? • Despite the stock performing spectacularly, your account won't reflect the same, due to small sizing.

@AdityaTodmal 2/ Three types of position sizing: 1. Fixed absolute Rupee amount that one is willing to risk. 2. % risk of the total capital. 3. Basis the edge. Risk tolerance should be taken into consideration while determining appropriate position sizing.

@AdityaTodmal 3/ Fixed absolute Rupee Amount: • Eg: Total capital is Rs. 10 lacs and the max risk per trade is Rs. 7500 • Lets say a stock is trading at 1200 and your SL is 1120 (i.e. your risk per unit us Rs. 1200-1120 =Rs. 80) • Optimum qty: 7500/80 = 94 units

@AdityaTodmal 4/ Percentage risk of total capital: • Lets say you want to risk 1% of the total capital on each trade. • Considering the total capital of Rs. 10 lacs, you shall risk Rs. 10,000 i.e. 1% of 10lacs on each trade. • Quantity to be traded/invested calculation remains the same.

@AdityaTodmal 5/ You can go for size without risking big: • CMP: 1100 • SL: 1085 • If your max risk per trade is 1% of the total capital, this setup would allow you to allocate 73% of your total capital and still be within your 1% risk limit.

@AdityaTodmal 6/ You can go for size without risking big, example 2: • CMP: 800 • SL: 791 • If your max risk per trade is 1% of the total capital, this setup would allow you to allocate 88% of your total capital and still be within your 1% risk limit.

@AdityaTodmal 7/ Smaller the stop bigger the size i.e. quantity • To go for size without risking huge, you need to reduce your stop. • To avoid getting stopped out on such small SL's, you need to bet only on proven edges.

@AdityaTodmal 8/ Sizing based on edge • Examples: - Triangle BO has the highest winning streaks, so go for 2% risk per trade on this edge. - Volatility Contraction Pattern (VCP): is the next best, so can go for 1.5% risk per trade. - Inside Bar, works for 50% of the time, so risk 0.75-1%.

@AdityaTodmal 9/ Bet big on your strong edge and less on average edge: • Conviction on your edge drives sizing. • To size based on your edge, you need to know what works for you and what doesn't. • To understand what works for you you should dive into your trading journal.

@AdityaTodmal 10/ Risk management along with position sizing: • Position sizing is not just the only key factor to be successful in this game. • The important factors are to know when to go big, when to stay small and when to fold✂️

@AdityaTodmal Larry Hite has two basic rules about winning in Trading as well as in Life: “Rule 1: If you don’t bet, you can’t win Rule 2: If you lose all your chips, you can’t bet”

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