I use the following formula to determine the optimal trading size for my options positions:Size = (p*(R+1)-1)/RR = profit/loss ratiop = chance of winning tradeLet's assume that we have a winning trading systemthat wins 40 percent of the time and has a profit/lossratio of 1.6.Using the formula:Size = (0.4*(1.6+1)-1)/1.6Size = 0.025This number states that we should risk 2.5 percent ofour capital on each trade to maximize growth.
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