By Brian Hunt in Growth Stock Wire:

Of all the friends in the world a trader can have, one of the most valuable is the concept of position sizing a strategy that tells you how much money to put into a given trade.

Most great traders will tell you to never risk more than 2% of your trading capital on any one position. One percent is better for most folks. A half a percent is also good.

So here's how the math works...

Let's say you're a trader with a $50,000 "grubstake." And you're thinking about buying Intel at $20 per share.

How many shares should you buy? Buy too much and you could suffer catastrophic damage if, say, an accounting scandal strikes Intel. Buy too little and you're not capitalizing on your great idea.

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