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VMby u/varga_maja·6dQuestion

New here, question about position sizing for illiquid assets

Been mostly trading liquid pairs like $EURUSD, but I'm looking at some micro-cap stocks where liquidity can be spotty. How do you all adjust your position sizing to account for potential slippage or difficulty exiting a position quickly without moving the market too much?

2 comments · 1 points

2 Comments

WKu/wkim·6d

That's a great question, and definitely a key difference when moving from forex to micro-caps. Have you considered using a small percentage of your overall portfolio, say 1-2%, for those illiquid plays to limit market impact on entry and exit?

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OKu/obi_k·5d

For illiquid assets, I typically reduce my standard position size significantly and often layer out of positions, even small ones, to avoid unwanted market impact. It's a different game than highly liquid forex.

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