Saint,
I have a very basic doubt...actually not a doubt, but a basic non-understanding of a key factor here.....position sizing.
See...in the current trade, we added to our shorts at 4279, with 4360 as a stop. So, we risked 81 points...lets say we risk 1% of our capital on it.
Now we get another add at 4249, with the stop moving down to 4352...which is we risk 103 points.
Now, the risk from the earlier add (4279) still stands at 73 points, which makes the total outstanding risk of this trade at 176 points(73+103). Now in such a scenario, how do we position size???? (No, we cant position size a new entry by taking 173 pt risk for this position. Our earlier position of 1% risk would have at best come down to 0.85% risk on capital..and risking the leftover 0.15 odd % of cap for 103 pts would make the position really miniscule.)
I hope I am able to express my problem correctly...if yes, please let me know your views.
Thanks as always,
Rakesh.
ps: Due to this dilemma, I skipped taking an add at 4249.