Larrie Cable Member  Posts: 36 Joined: 10/11/2012 Location: Bedford, NH  User Profile | I'm not sure the % limit on low volume for trade size actually will accomplish what I was attempting to explain as my concern. The % of Low Volume for maximum trade size ensures that each of us do not own an excessive number of shares of a given company (independent of the % or our account balance).... as our accounts grow and our allocations to each trade grow into (hopefully) formidable size. The issue I was trying to identify is that with a number of strategies often selecting the same equity to purchase, there is the potential (actually happening during current simulations/trade recommendations) that regardless of account balance, three, four and (sometimes) more strategies, each with a trade allocation of say 10% for arguments sake, are recommended for purchase. Should we (or the trade processor) follow these recommendations without further risk control/restrictions we could find ourselves with 30%, 40% or 50% or our account balance tied up in a single equity.... Not quite the diversification we are attempting to create... even for the risk-takers. Jim's note on ensuring the risk control include both recommended shares and existing positions is critical for effective risk management. [Edited by Larrie Cable on 10/19/2012 9:05 PM] | |
