Breakout Trading using Time and Sales

Just curious about something about stock trading: why do stock traders always adjust position size according to share lots and not £ amount invested? Like it seems stock day traders focus more on whether it's 100,1000,2000 shares rather than the dollar amount of money?

Not sure I explained myself well there but hoping you understand what I mean
 
Chartsy said:
Just curious about something about stock trading: why do stock traders always adjust position size according to share lots and not £ amount invested? Like it seems stock day traders focus more on whether it's 100,1000,2000 shares rather than the dollar amount of money?

Not sure I explained myself well there but hoping you understand what I mean
Click to expand...

Hi Chartsy.
I obviously don't know why others do that but I position size based on the volatility of a stock. Two stocks could have about the same dollar price per share but how much each share moves in a given time period can vary quite a lot. Some stocks are just slow movers and some are fast. This means, for example, that a sensible Stop for stocks of different volatility is itself different. Recent news, or whatever, covering an individual stock or even the sector it is in can have quite an impact on that stocks volatility. I use ATR of the relevant timeframe in my calculation.

Not sure that makes sense, or even comes close to answering your question - LOL

Cheers
Steve
 
Thank you Steve. I would also add that if you're disciplined enough to consistently cut your losses as small as possible, then taking a consistent 1000 shares on each trade is appropriate, irrespective of the price of the stock. Of course, that doesn't mean you trade 1000 shares on AAPL, but personally, I like trading stocks ranging between $10 and $80. Anything more is usually too volatile.
 
Trades in this first 90 minutes of market:

FAZ: -3 cents per share
QCOM: +41 cents per share
 
QCOM was on the 5-minute chart...nice breakout to new highs...I'm pretty sure it was a pre-mature exit, but a modest gain nonetheless.
 
Another trader I know got more than 3 times what I got on QCOM!! Kudos to him ;)
 
Two more trades on QCOM:

-7 cents per share breakout failed
+2 cents per share breakout

QCOM a bit choppy now, so likely to stay away.
 
+14 cents per share MAPP breakout to new highs...may have got out a little too early though
 
You must log in or register to reply here.

Similar threads

robocop
Early Morning Range Breakouts using time and sales
24 25 26
Replies
512
Views
53K
robocop
robocop
T
Momentum Breakout Strategy
Replies
1
Views
3K
tradingteacher
T
C
Time and Sales data
Replies
3
Views
4K
meatmonkey
M
A
estx time and sales
Replies
1
Views
4K
Trader333
Trader333
R
Where To Buy NASDAQ 100 Historical Time And Sales Data?
Replies
9
Views
5K
EmotionIsTheBigEvel
E
Top