Risk per trade vs. buying power

[Lexie 3]

Hi BBT community,

I am re-doing some of my hot keys and want to know why a person would choose to calculate share size with Buying Power vs. Risk per trade in the hotkey scripts.

 

[SirPatrick 9]

Trading with leverage can increase your reward but in turn can increase your risk. You'd have to have a well defined stop loss such that your risk to reward is > 2, which is an accepted "standard" at BBT. I personally wouldn't trade using too high of leverage (I have in the past and paid for it), but it is really up to the individual's personal style and risk thresholds. So in a nutshell I wouldn't use a hotkey based off of buying power / leverage, but that's me.

Happy trading!
P