Varsity : Position Sizing for active traders (Part 2)

General
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Position Sizing for active traders (Part 2)

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Learn to define equity capital and estimate equity capital in this Varsity chapter by Karthik Rangappa.

Key takeaways from this chapter

  • Estimating equity capital is crucial for position sizing
  • Core equity model deducts the capital allocated to a trade and recalculate the capital available
  • Total Equity model requires you to add the free cash, margins blocked, and the P&L of the positions to estimate the equity capital
  • Reduced Total Equity model requires you to add the free cash to the locked in profits of an existing position