Thanks for all the info thus far! I'm just getting the ball rolling and have a question regarding position sizing based on a percentage of your trading account.

Assuming the formula "account risk / trade risk = number of shares to trade", there seems to be times when the potential position size could be 70%+ of the account. For example let's assume an account size of $100,000 and a risk percentage of 1%. If we find an opportunity to buy shares at a price of $15, with a stop at $14.8, we're looking at a position size of $75,000 (1,000 / .2 = 5,000 shares and 5,000 * $15 = $75,000).

I understand this is based on your stop exiting you out of the position, however isn't there potential risk of the price gapping below your stop overnight? It seems very risky. Furthermore, this formula doesn't work if our stop remains the same size yet share price increases (5,000 * $21 = $105,000).

Am i missing something here? Thanks in advance for any help.