Position Sizing and Risk Management Basics
AlertWays passes the TradingView strategy order size directly to the exchange.Therefore, precisely setting sizing and stop-loss/take-profit standards in TradingView before live trading is the core of risk management.
1 Select Sizing Method
Choose a sizing method that suits your investment style. This can be adjusted within the TradingView strategy settings under the 'Properties' tab.
- Fixed Size: Orders a simply fixed quantity, but it's hard to respond to market volatility.
- Percentage Based: Invest a certain percentage (%) of total balance to enjoy compound interest effects.
- Risk Based: Calculates the distance to the stop-loss price to keep the amount lost constant when a loss occurs.
2 Setting Stop-Loss/Take-Profit Standards
For stable auto-trading, Stop Loss it is important to establish the habit of setting the range first.
- Risk/Reward Ratio Management: Statistically, it is advantageous to set the take-profit target between 1.5 to 3 times the stop-loss range.
- Risk Limit: Design your strategy so that you do not lose more than 1~2% of total assets per trade.
- Verification: If logic changes, strictly check the Paper Tradingto verify order size first.
3 Pre-execution Checklist
Before turning on the auto-trading switch, finally check if the order figures to be executed are safe.
- Check if the 'Order Size' in TradingView strategy test results matches your expectations.
- Order History DashboardCheck via that slippage upon entry and exit is not excessive.
- When using leverage, verify that the liquidation price is set with enough buffer compared to the stop-loss price.
"Risk management is more important than profit-making skills. Stick to principles with figure-based trading."