Stage Analysis Video Training Course

Stage Analysis Beginners Questions - Page 160

RE: Stage Analysis Beginners Questions

Stan Weinstein recommends in his book that a small account ($1000-25000) should diversify in no more than 5 or 6 stocks. Someone with a bigger account ($100000) however can invest in 10 to 20 stocks.
In the 7 months in which I've been trading/investing the Weinstein Way, I've been risking 1% of my account on each trade mainly because I've learned from multiple sources less experienced traders should risk no more than 1%. My little experience has shown me that risking 1% per trade would take roughly 18-22 trades for my account to be fully invested during good market conditions. I remember almost going insane trying to manage 20+ positions back in November last year when breakouts were popping up almost on a daily basis. The market seems to be improving once again and my position count is currently at 18. Once again I'm starting to feel uncomfortable with this much diversification.

I believe I'd be more comfortable with 7-10 positions on a fully invested account, but I would have to increase my risk per trade from 1% to maybe 1.5%. The problem here is that I'm afraid my account will have equity swings too wild for me to handle.
I'd like to hear you all's input in this matter:
how many positions do you tend to have on a fully invested account?
How much of your account balance do you risk per trade?
How volatile is your equity curve in relation to your risk per trade?

Thanks in advance for your input on this matter


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