Lesson Overview

Allocation Per Trade

At the heart of all high probability systems there is a requirement that you have small positions with every trade. If you learn how to trade small you almost completely remove the risk of blowing up your account.

If each individual trade is small you can withstand a complete loss on that particular trade if the stock makes a huge move in one direction or another. This protects us from the so called "black swan" events that will happen again in the future - count on it.

Contrary to popular belief though, studies have been shown to prove that actually making smaller trades is more successful regardless of your win rate.

In other words, if you have two traders who make the exact same amount of trades and are winning at the same rate the person who trades smaller ends up with a higher profit at the end of the year.

More Discussion

Was This Helpful? Add Comments/Questions

eBook Download

The "Ultimate" Options Guide

Ultimate Options Strategy Guide

The step-by-step guide on how to set up each of the top 18+ options strategies we trade to generate monthly income. Read the whole strategy guide in less than 30 mins and have it forever to reference.

Download PDF

Join More Than 47,345 Members

Membership is always free & you can upgrade anytime to unlock our live trades.