Fixed Sum


This method says : independent of the account state, always enter the position with the same Sum. Although this method is fairy safe, it does not allow the account to grow in geometrical progression. If this strategy is selected, an equal dollar position size is established for each trade. The number of shares is determined by dividing the price of security into the desired position size.

Formula:

Number_of_shares = Fixed_Sum / Security_Price

Example:

Fixed Sum - 2000 $

Security Price - 20$

In this case you can buy 2000 / 20 = 100 shares


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