![]() ![]() Thenwhat is the adequate amount of risk? From Van Tharp wecan see that he has two examples and computes the probability ofrisk/reward according to previous trades. Ifyou risk too much you increase the probability of loosing all. If you risk too little, you will not be rewardedsufficiently to cover your commission and administrative costs. This decision determines the real risk thatof every trade. This is afunction of the risk that is intended to carry on every trade and theplace that one should leave a trade and accept the loss. It is important to know what is the optimumamount of money that one should place on every trade. ![]() Position Sizing Position Sizing How much to bet in eachtrade J.
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