Let say i want to take a trade in a company x.
The current price of the shares of the company is Rs 211.05…
Let say,
According to my set up a shorting opportunity is created:-
Entry price :- Rs 211.05
Stop loss :- Rs 212.10
Risk per share :- Rs 1.05
Account capital :- Rs 10,000
Risk per trade :- 1% = Rs100
So, according to risk management -
no of shares to buy :- 100/1.05 = 95 shares(appr.)
So, position sizing :- 95* entry price
= 95* 211.05
= Rs 20,049
Now the question is how can be my position sizing is greater than my account capital…
Please i need to clarify this , i am looking for the answer for a long time but didn’t get it…
Please i need a full clarification…
@ShubhS9
You replies can make wonders… I appreciate your replies