 Hello everyone and welcome. This is Melissa Arma with the Stock Swoosh and today I wanted to talk to you about the importance of trade sizing. It's something that I think a lot of people overlook. One of these days I'm going to get on the whiteboard and I'm going to do a show for everyone and show you written down examples on the board of exactly what I mean. But just to speak a little bit about it today briefly, the bottom line is that when you're taking trades, most of your trades should be as close as you can to the same sizing, whatever that sizing is that you choose of dollar and cent risk. That means that your share quantity is not going to be the same for every trade. Whether you're doing options, the cost of options vary, whether you're doing day trades, the cost of the stop, the difference between the risk and the entry and the stop varies. You cannot take a thousand shares, a thousand shares or even one contract in every single option, whatever the case may be. You could take one contract in Amazon that may cost $50 which is $5,000 and if you're not risking $5,000 in every trade, then you're upside down in your risk. That isn't good. What do I mean? Say you take three trades, okay? And so say two of those three trades are positive. Say there are 100% wins, 100% return investments, two positive trades in two options. I'm just making up an example. Then say the third trade is a loser, okay? So what is your win ratio? Your win ratio then is what? Your win ratio is 66% roughly, okay? That's a good win ratio people. So you should be up money. Let's say in this example, the one loser you took an Amazon trade, it cost $50 for one. So you spent $5,000 and the other two trades, you spend two grand on both of those. So you made two grand on the one, made 100%, you made two grand on the other, made 100%, so you made what? $4,000, you lost in the Amazon and you are down what? $1,000. When your win ratio is 66%, do you see how that's off and now it's screwed up? You're going to have a great win ratio but if your trade sizing is off, it's going to be all messed up. So that is not where you want to be. That is why your sizing is so, so critical. And I think people don't understand that. They think of sizing in reference to number of shares or contracts. Every single trade that I take could vary in my sizing. And again, this is not an exact science. If something costs $2,050, I'm not saying you have to undercut it under the two. And so this is an average. But the idea of risking double or triple or quadruple, the amount of risk in a trade is going to make your whole P&L go like this. And consequently, you can have fabulous win ratio but be down money. And that's not where you want to be. And that will be a shame because if you're doing a strategy like mine that works, you want to make sure that you book profits and that you're consistent. And the consistency has to be not only with the gains and the wins, but it has to be with the risk too. Okay. So that's just so how you know and sizing. And again, I'm going to do a mini class maybe and get on my board behind me so you can see really some real life examples. But I just want to do a quick lecture on that tonight. If you're interested in more information, I want to sign up for the next Golden Gap course. I'm doing one more class in August, end of the month, right before fall trading period, August 28th and 29th. If you're interested, email me at Melissa at the stockswush.com. Have a great day, everyone.