In this video…
I’ll walk you through on how to position size your trades and how many shares to buy.
So that you can follow the risk management that I’ve set earlier.
How to Position Size Your Trades
You’re buying 20 equal positions of stock.
Let's say you’re going to buy FIVN:
And let's say you want to buy shares such that it’s 5% of your $100,000 portfolio value.
How do you do that?
You can do it in an Excel Spreadsheet I’ve prepared for you:
You can get it in the Resources Section.
Let's say your capital is $100,000.
Your risk is 5%.
The next thing you need to know is the Buy Price.
You can get your Buy Price by looking at the Asking Price, which is $54.50
For the stop loss level, leave this as zero.
Because you’ll manually exit the trade when it closes below 10% from the highs.
What you want to do is to buy $5,000.00 worth of FIVN at this point in time.
According to the numbers you’ve put in the Excel spreadsheet, you can buy 91.7 shares of FIVN.
If you multiply 91.7 by $54.5, you get $4959.60.
This is the total value of this stock that you're buying.
Since you cannot buy fractional shares here, let's just buy 91 shares of FIVN.