MY APPROACH ON
POSITION SIZING
Reference:
https://www.platinumtradingacademy.com/

INDEX
1. My Approach On Position Sizing
2. Risk Vs Position Sizing
3. Flash Trades
4. Radar Trades
5. Fundamental Trades
6. Other Data

MY APPROACH ON POSITION SIZING
 Over the past week, I was asked a few questions
about my trading thoughts and my position
regarding the sizing of the trades that I place with
the PREMIUM SERVICE.
 I promised that I would address this matter via this
week’s blog so below I supply my general thoughts
on how I approach position sizing.

1. I have three types of trade:
1. FLASH
2. RADAR
3. FUNDAMENTAL.
2. There are three sizes of lots available: MICRO, MINI
and STANDARD.
3. There are a few types of currency pairs in my eyes:
 USD major – EUR/USD, GBP/USD, USD/JPY and
USD/CHF.

 Major commodity pairs – AUD/USD, NZD/USD and
USD/CAD.
 Minor commodity pairs – USD/NOK and USD/MXN
 Cross-Rates – EUR/GBP, EUR/JPY, GBP/CHF,
AUD/CHF, NZD/CHF and AUD/NZD.
 Commodity cross-rates – EUR/AUD, GBP/AUD,
EUR/NZD, GBP/NZD, EUR/CAD and GBP/CAD.
 JPY pairs – AUD/JPY, CAD/JPY, CHF/JPY, GBP/JPY
and NZD/JPY.

 Others USD/SEK, AUD/CAD, SEK/JPY, EUR/SEK,
and EUR/NOK Obviously there are hundreds of
currency pairs but those listed are the ones that
interest me and form the basis of my Forex trading
broker accounts.

 I approach each category listed above by RISK
MANAGEMENT and RISK TOLERANCE.
 This is based upon the broker account used.
 Inside the EDUCATION tab of the PREMIUM
SERVICE there are a couple of articles about why I
trade with multiple brokers, these articles should
also be read to get a wider understanding of my
approach.

RISK VS POSITION SIZING
 The maximum that I will risk is about 3% of my
broker account balance in total for all active live
trades.
 Many of you have already stated that you see this
as too low.
 From my perspective it is the only way to give you
longevity in trading.

 The Forex market takes no prisoners, if you are not
boxing clever you will get wiped out eventually
unless you trade with disciplines.
 This is an overview, a macro level view, of my
approach to position sizing.

FLASH TRADES
 USD MAJORS & MAJOR COMMODITY PAIRS –
usually MINI or STANDARD LOT TRADES, but
never close to the 3% limit to allow me flexibility to
add or reduce the position size/exposure.

 FLASH TRADES would in 99% of cases not be
done on other categories of currency pairs unless
after a news breaking data release.
 These trades would be MICRO or MINI lot trades,
maximum of 0.5% RISK per trade.
 These are small trades most of the time.

RADAR TRADES
 All currency pairs are entertained and risks are
limited.
 I will risk maybe 0.5%-0.75% if pushed (my
TRADING PLAN says 1% but this is for extreme
circumstances) on USD majors, JPY pairs, Major
Commodity Pairs and between 0.4% - 0.5% on the
rest.

 A mixture of MINI, MICRO and STANDARD lots are
used.
 Do not be surprised when I tell you that for some of
the more exotic pairs my trade size to get me
started can be just 4/5 MICRO LOTS.

FUNDAMENTAL TRADES
 These types of trades are usually reserved for the
commodity crosses.
 I have had real identity issues with this category in
2014.
 These trades are all limited to just one of my
brokers.

OTHER DATA
 As a general rule: STANDARD LOTS are only used
for USD related currency pairs plus the EUR/GBP
and EUR/JPY.
 So to recap, even though I have my 0.5% limit on a
trade I DO NOT max out on a position / trade size
every time.

 I will add to trades and reduce trade sizes before
Fibonacci levels, pivot points or simple previously
noted heavily used horizontal supports.
 With JPY pairs when I used to trade them quite
frequently, round numbers would do either at 50 or
100 levels.
 For the exotic pairs I tend not to add or reduce
sizing too much, most of my playing with sizing is
due to risk.

 STANDARD LOT trading attracts more risk than
MICRO LOT trading, hence the reason I am always
looking to add to or reduce my RISK EXPOSURE.
 Conversely, that's why I also tend to let MICRO lots
either work or not work out.

 When entering a trade where I want to have say a
STANDARD LOT size, I may just start with 2-5 x
MINI lots and add as the trade takes momentum in
the direction that I want.
 This allows me to have an initial wider stop in place
that I can tighten later as I add to the trade size.

 It is not rocket science but it does take practice.
 Knowing the maximum risk per trade per broker
account is the first thing and from then on it’s plain
sailing.

 Let me reiterate, its all about RISK MANAGEMENT.
 You can be speculative to a point, but at the end of
the day longevity in trading emanates from being
savvy and limiting RISK EXPOSURE along with
chart analysis and identifying chart high probability
patterns.

THANK YOU