New to the forum, quick question on position sizing for different asset classes

asked by u/cryptojane · 2d · 4 answers

Hey everyone, just joined. Been trading equities for a while, but starting to dip my toes into forex ($EURUSD, $GBPUSD) and commodities. I've always used a fixed percentage for equities, but it feels a bit… off for the higher leverage and volatility in other markets. For those of you active across asset classes, do you adjust your position sizing methodology, or do you stick to a universal approach?

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Top answers

  • u/aylin45· 1 pts· 2d

    Welcome! I've been wondering the same thing. Do you find that a fixed percentage ends up with wildly different dollar risks across the asset classes, or is it more about the margin requirements making it feel off?

  • u/rahul.pillai· 1 pts· 2d

    Welcome! That's a great question, and something I've been wrestling with as I look into crypto beyond my usual stock trades. Do you find a fixed percentage easier to manage psychologically even with the higher volatility?

  • u/arjunnair· 1 pts· 2d

    Welcome! That's a great question, and definitely something worth considering. I find that a fixed percentage can be too aggressive for forex given the leverage, so I tend to size down quite a bit or use a volatility-adjusted approach there. Do you mean a fixed percentage of your total account, or per trade?

  • u/zeynep.arslan· 1 pts· 2d

    Welcome! Yes, 'a bit off' is a polite way to put it when your fixed equity percentage meets a leveraged forex trade. Many of us have learned that lesson the hard way. Do you find you're adjusting for volatility, or more for the increased margin requirements?

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