|Brainy's Share Market Toolbox|
An arsenal of weapons to help you tackle the share market.
|Monthly Share Market eNews email update|
Maximise profits with
optimised position size
|eNews + eBook Articles Update ||#60 - March 2014|
This month's Share Market eNews email
is going to all of our subscribing Share Market Toolbox
Members as normal, and to the non-Members who have expressed an
interest in receiving it. (Any non-members who want to access the detail
in the Members Area can easily join as a Toolbox Member
- it's not expensive.)
"Position size" - simple, yes?
No! - It can pay to optimise with clever tools,
and increase our profits!
When we buy a parcel
of shares, some people simply invest the same amount of money in each
parcel they buy - perhaps $5,000 or $10,000 worth (this is the "Fixed Dollar Amount" per trade
method). Should we think about adjusting this amount? How could we easily do that?
Another way to look at
this is to factor in the amount of investment capital that we have, and
to also factor in the portion of this capital that we are prepared to
"put at risk". This is where a good Position Size Calculator can be very
It can be very beneficial to consider the
"optimum" amount of capital to allocate to a position.
By risking the maximum amount that
you have decided you are prepared to "risk",
then you are taking maximum advantage
of favourable price movements to maximise profits.
Some rather simplistic
research can demonstrate that portfolio performance can be increased by
a significant amount. This is because we can "optimise" the position
size, by maximising the amount of money to invest in the performing
stocks (for a greater profit). See more details below
In case you missed last month's topic, I finished a series of updates on the topic of exit strategies. You can see that material here in the eNews archive.
Any non-member who no
longer wants to receive this material on a monthly basis can simply
unsubscribe from ALL topics using the SafeUnsubscribe link at the bottom
- or just Update Your Profile
to change your interests
. (BUT NOTE
: Toolbox Members and BullCharts mailing list members should not unsubscribe, as it will remove you from all my mail lists.) Please
remember, anything mentioned here, and in the referred eBook Articles,
is for general education only, and is not advice of any sort.
Please read on....
About the eNews emails...
Just a short note to the recently new Toolbox Members:- These share market eNews emails
always go to Toolbox Members (a part of the Toolbox service), and to
the people who have registered to receive occasional information about
the Share Market. This is a monthly email with some pointers and tips
on focused topics - see a quick intro to the eNews emails
. They often include references to specific eBook Articles
in my Share Market Toolbox
, as well as key web pages in the free area of the Toolbox (eg. on the extensive Share Market web page
I have been writing the eBook Articles since October 2008 - that's
more than five years, and these eNews emails help you to navigate to
related and useful information each month.
Robert is always very happy to receive feedback about the Toolbox, and the articles and weapons therein.
Please feel free to contact Robert by email or phone.
Price charts summarise the underlying opinions
and emotions of the market participants.
Every chart tells a story. It's helpful to
understand the stories in the price charts.
This month's focus:
Optimising position size and Position Size Calculator
can be very beneficial to consider the "optimum" amount of capital to
allocate to an investment position in the share market. By risking the
maximum amount that you have already decided you are prepared to "risk",
then you are taking maximum advantage of favourable price movements to
For this month's update to eBook Articles and toolbox materials, I have updated the existing Position Size Calculator,
posted a new web page, and revamped an existing eBook Article (it's now
10 pages long). Also see the links to view the following articles on
the Articles Table of Contents page.
I have to express some caution regarding the position size calculator
spreadsheet. It has taken me a lot of fiddling and fine-tuning over 3
years, with some creeping improvements, a couple of which are not yet
completed (eg. including a reference to slippage). I must also
say that many people have created their own spreadsheet calculators,
some of which are very powerful, and some of which are not that
intuitive to use (except for the creator who knows how it works and how
to use it).
I also must thank everyone who has sent me sample calculators, or
provided input and ideas, and assisted with the development of this one
(mostly BullCharts software users).
Here are the links to this month's information:-
- Position Size Calculator
- This is the key item this month. An updated spreadsheet tool to
calculate an optimised position size based on some key parameters (like
total trading capital, and money management and risk management basic
rules). You enter portfolio constraints in the yellow cells, and stock
price data into the green cells. See the links to download the calculator.
- New web page - Optimising position size, provides a quick overview of the topic, and useful web links.
- Article ST-4400, "Position size and Calculator" -
An existing eBook Article, now expanded to 10 pages, with refreshed
images that refer to the revised Position Size Calculator. Toolbox
Members can see Article ST-4400. Toolbox non-members can see the free page 1.
- Helpful video - For BullCharts software users, there is also a 6-minute video
of how to use the BullCharts Trade Planner (position size calculator),
which is another variation on position sizing, but is handily built into
the BullCharts software. (There is a link to this video from the Trade Planner item in Robert's BullCharts KnowledgeBase.
growing collection of eBook (PDF) Articles, don't forget to see the
latest Table of Contents pages for all articles (see links in the
side-bar above right). There are
now a total of 138 Articles in this collection of eBook Articles - a
whopping total of 634 pages of information! You can see the Table of Contents for all eBook Articles here (recently new or updated ones are highlighted), and the Master Toolbox Index which includes the eBook Articles, plus web page references, and helpful videos.
eBook (PDF) Articles - Summary
Since October 2008 I have accumulated quite a collection of eBook (PDF) Articles
on three subject areas - Share Trading/Investing, Technical Analysis
and BullCharts software (actually more than 630 pages of material
in more than 138 articles). These Articles are invaluable for both new
and experienced investors and traders. I write brief monthly notes in
this eNews email to highlight specific Articles on targeted topics, and
sometimes referring to new or updated web pages in the Toolbox (also see
a history of Toolbox updates). I am also writing new Articles and updating existing ones as required. For more information please see:
Article front pages
For any new readers of my Toolbox eBook Articles, there are some useful introductory Articles including an Introduction and an Overview Article for each of the three subject areas. You can see them here:
What if you have some
sort of problem with accessing the Toolbox and any of these Articles? Or
maybe the Username and Password doesn't work. If there is any problem
at all, simply contact me by email or phone. The best email address for
this is: firstname.lastname@example.org
Occasionally emails disappear - the system thinks they are spam, or the
ISP might think they are spam. If I don't reply within a day or so,
please contact me by either email address or phone
is nothing secret in this email, so feel free to forward it to someone
if you think they might benefit from the information, or from being a
Toolbox Member. The easiest way to do this is to use the "Forward Email"
link at the bottom.
am also confident that my Toolbox Members won't be sharing their
username and password with non-members. It is not fair that I spend all
this time preparing the materials, and then my Toolbox Members pay money
to have legitimate access, only to let some people pay nothing to read
and view the details.
feel free to email an individual Article to others as a sample; but if
they want online access to all the materials, it is pretty cheap, so
they should subscribe as a Toolbox Member. There is information about Toolbox Membership in the Quick Links section at right.
Always happy to receive feedback, or suggestions for new content or improvements.
Until next month,
happy investing or trading,
Robert B. Brain
(mobile: 0438 355 910)
ps: watch out for the sharks in the ocean!