Stock Swing Trading Techniques - Balance Your Positions Equally

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What Is Position Equalization

Two Unrelated Companies Little Correlation Between Two Stocks How Many Shares Do You Buy Of Each Company?

Unbalanced Positions Cause Problems Profits Are Not Even Losses Are Not Even 7 winners = $1.00 = $7.00 3 Losers = $3.00 = $9.00 You lost $2.00 dollars and you were right 70% of all trades Copyright ÂŠ 2007-2013 Market Geeks, LLC. All Rights Reserved.

Average True Range Indicator Simple Calculation

Daily Trading Range 10 Day Average Most Analysis Software Have ATR Build In

Check The ATR For Each Stock

First Thing First Pick The Most Volatile Stock Figure Out How Many Shares You Want To Trade Equalize The Second Position To Equal The First One

The Secret Formula Divide the larger position by the smaller position and multiply that number by the share size. In our example the larger positions ATR is .74 and the smaller positions ATR is .43. (You would divide .74/.43 = 1.69) Multiply the result by the amount of shares you chose to trade the more volatile stock. (1.69 * 100 Shares) = 169 Shares Since 100 shares were chosen for Clorex stock, you would multiply 1.69 * 100 shares = 169 shares of Symantec stock Trade 169 shares of Clorex stock for every 100 shares of Clorex stock

Profitability Is Just One Piece To The Puzzle All Positions Need To Be Balanced

Positions Need Constant Adjustment ATR Is Different Than When First Entered

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