The number of hares to purchase is automatically calculated on BUY orders.
Calculation Logic:
Given a trading account with buying power of $25,000, we calculate the amount we are willing to risk 3% -> $750
Knowing the max amount we can risk for a BUY order now we can easily calculate the number of shares we purchase by dividing dolarAmountToRisk to sharePrice
Buying power: $25,000
Position risk percent: 3%
Share price: $10
Amount to risk for a position: $25,000 / 3 * 100 --> $750
Shares to buy: $750/$10 --> $75
Risking only 3% of the account on a particular security will allow us to be more resilient to losses.
Done when:
Calculation Logic: Given a trading account with buying power of
$25,000, we calculate the amount we are willing to risk3% -> $750Knowing the max amount we can risk for a BUY order now we can easily calculate the number of shares we purchase by dividingdolarAmountToRisktosharePriceRisking only 3% of the account on a particular security will allow us to be more resilient to losses.