(Last Updated On: March 9, 2020)

– How many intraday trades do you generally generate in a day on average?

– One or two?

– Just one or two every single day. Okay, so which means that if you risk 1% for each trade, you realize that your daily fluctuation of equity will range between plus two or minus 2% of your total equity. Get my point?

– Yeah.

– Is this kind of fluctuation comfortable for you on a day by day basis?

– Okay, you think about it, if that is comfortable for you like equity drawn out 2% or profit of 2% of your equity on a day by day basis is comfortable enough for you, then maybe you can start with 1% but generally I would suggest most people to start with 0.5% especially if you’re in intraday trader.
Okay, then with this 0.5% or this 1% then you go and use this amount and you’re starting capital to actually size your trade. If your starting capital is very, very small size, I would say like maybe if you’re just starting with 5,000 or $10,000 or rupees, I’m not sure how much I’m just using based on U.S. dollars, alright. When you size the trade, if you are you, are trading in, if you just, what’s the kind of instrument you are trading? Are you trading futures? Or are you trading the actual stock itself, futures itself?

– Futures, yeah.

– So futures will probably have a minimum lot size, right?

– And the minimum lot size. I’m not sure what is the value of a minimum lot size. So if you’re trading capital is not big enough, a minimum lot size can potentially become a huge position for you.

– Okay.

– You get my point. So there’s something you’ve got to think about at this point time because I don’t have all the detail information. I was looking, I’ll go through with you as actually how you go about sizing your trade, because I actually don’t look at the futures in Indian stock market, so I don’t know what it’s the minimum lot size. So you have to probably chat with your friend as well. How does he go about sizing his trades? I hope that he’s using a proper method to size the trades to make sure that at any point in time he knows how much risk of his total equity he’s risking in each position.

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