January 12, 2004

Out of Money Again

I placed three more buy order with the money I raised today. I placed orders to buy AMKR at $20.65, CACS at 16.10 and DIGE at 44.40. Then I ran out of cash. That left me with five more orders I would like to have placed. Like I said before, I wish they would let me use margin in my IRA account.

I have downsized my position sizing to allow me to make more trades. Previously I was putting about 4.7% of my total equity into each trade. Now I’m putting only 3.3% of my total equity into each trade. As long as I have more trades to make than I have money, this would seem to be a good strategy.

I sell any stock that drops 7% to 8% below my buy point. When I was putting 4.7% of my equity into a trade, it meant I was risking 0.35% of my equity. With my new numbers, I’m down to risking 0.25% of my total stash on each trade.

Posted by Ted at January 12, 2004 8:54 PM