Position Sizing for active traders (Part 2)
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