The first step is to determine the maximum capital per position, or the most money that should be invested in a single trade. This figure is calculated by dividing the total capital in your account by the number of positions you wish to take. If you have $100,000 of risk capital to trade with and you want to take four positions, allocate an equal dollar amount to each position:
Capital per Position = XT . c L, r r Number of Positions
Risk Capital = $100,000
Number of Positions = 4
The maximum capital per position you should being willing to invest is $25,000.
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