[Ponki]

Hi all,

I have another few questions. Currently I am reading the following books. Ho to make money in stocks - Oneil, Trade like a stock market wizard - Minervini, secrets to profiting in bull and bear markets - Weinstein.

Now although all the books differ to a certain degree they all share one common principle trading with the trend.

Thus the thing that makes Weinstein's book even more appealing is that fact that I work full time and its tough for me to follow Minervini's method to the T by watching the relative volume through out the day and then buying on the break out if the volume is there.

But what seems attractive w.r.t Minervini's method its seems more precise with regrads to position sizing... if I can call it that.

Look at the example of FCX since copper is breaking out.

Lets say you have a $20,000 account thus risking 1% per trade equals $200.

Now with a ATR of 1.63 and a stop loss of 3x of ATR = 4.89

Thus you trade will look like this:
Entry: 13.89
Stop: 8.95 (No round numbers)
Position size = $200/4.94 =40 shares *13.89 = $555.50

Now this is what I do not get your position size is not even 3% of your total capital?

Or would you do this trade and then add to the position (Pull backs to 10 week sma) and as the stock moves in your favor you average up and your position will get bigger with time?

---

FCX

The position size is so small becuase the ATR value is very large on this particular stock. i.e. almost 12% movement a week. So the position size is much smaller because of this.

However, you are using the ATR value that I use for the investor method that focuses on weekly charts, whereas Minervini's method is for the trader method that uses daily charts, so I'd recommend looking at a daily ATR value such as the 20 day ATR, as you are going to be using much tighter stop losses than that, and hence your position size will be larger.

Thank you Isatrader! Now the next question what is your min position size % based on ATR and Stops that you would consider a worth while trade?

I would guess 5% of capital?