Using The Long Position Tool On Investing.Com: A Guide

The Long Position tool on TradingView allows investors to estimate the outcome of an order if they go long or short. It also shows the Profit & Loss (PnL) and estimates the risk and closing account balance when the price reaches the profit target or stop loss levels. To use the tool, investors need to create a Long Position or Short Position drawing and enter their initial account size, risk amount, and Lot Size. The drawing tool tags will then display the position size and account balance when the position is closed. This tool helps investors practice placing orders and seeing results without risking real money in the markets.

Long position tool may suggest a buy quantity that exceeds your account size

The long position tool is a feature offered by TradingView, a platform popular among traders for its wide range of tools and indicators to analyse and execute trades. This tool allows traders to enter into long positions, which means they are expecting the price of an asset to rise.

Now, when using the long position tool, it is crucial to understand the concept of lot size. Lot size refers to the number of units of an asset you will buy or sell in a single trade. It is a customizable parameter that you can adjust based on your risk tolerance, account size, and trading strategy.

However, one issue that has been reported by users is that the long position tool may suggest a buy quantity that exceeds the user's account size. For example, let's say your account size is $5000, and you want to long VOO at $405 with a 2% risk. The tool might suggest a buy quantity of 13, which totals $5265, exceeding your account size.

This can be a problem because it may result in you unintentionally using margin. To avoid this, you have to manually calculate the total amount to ensure you're not spending more than you have. Some online calculators can help you with this by showing your "involved capital" in percentage terms, making it easier to see if your position would exceed your account size.

To address this issue, it has been suggested that TradingView should include a feature that automatically prevents users from exceeding their available capital when using the long position tool. This would provide a more reliable and safer trading experience for users.

You can calculate your position size and account balance

To calculate your position size and account balance, you need to consider a few factors, including your initial account size, risk tolerance, and the price of the asset you want to invest in. Here is a step-by-step guide:

• Determine your initial account size: This is the total amount of cash or cash equivalents that you have available for trading. For example, let's say your account size is $5,000.
• Assess your risk tolerance: Decide on the percentage of your account that you are willing to risk on a single trade. Many investors choose to risk a small percentage, such as 1% or 2%, to ensure that any single loss is not significant. So, if you have a $5,000 account and decide to risk 2%, your risk per trade would be $100.
• Calculate the risk per share: This is determined by the difference between the entry price (the price at which you plan to buy the asset) and the stop-loss price (the price at which you will automatically sell to limit losses). For example, if you want to buy a stock at $50 and set a stop-loss at $45, your risk per share is $5 ($50 - $45).
• Compute the position size: To find the number of shares or units to buy or sell, divide the risk per trade by the risk per share. In the above example, if you are willing to risk $100 and the risk per share is $5, your position size would be 20 shares ($100 / $5).
• Calculate the account balance after closing the position: Your account balance when you close the position will depend on whether you reach your take profit or stop-loss level.

• Account Balance when the take profit level is reached: Amount = Initial Account Size + (Take Profit Level - Entry Price) Position Size Point Value Lot Size.
• Account Balance when the stop-loss level is reached: Amount = Initial Account Size - (Entry Price - Stop Loss Level) Position Size Point Value Lot Size.

Let's say your initial account size is $5,000, your entry price is $50, and your take profit level is $60. If your position size is 20 shares, and the lot size and point value are both 1, your account balance after closing the position at the take profit level would be: Amount = $5,000 + ($60 - $50) * 20 * 1 * 1 = $5,200.

These calculations can be adjusted for volatility and other factors, and it's important to keep accurate records of your trades to refine your strategy. Additionally, online tools and trading platforms often offer position size calculators to automate these calculations.

You can practice placing orders without risking real money

Trading and investing can be risky, and it is always a good idea to practice before risking real money. Trading simulators and demo accounts are excellent ways to practice placing orders and gain experience without the fear of losing money.

Paper Trading

Paper trading is a form of simulated trading that allows you to practice your trading skills using hypothetical trades without risking real money. It is a valuable tool for new traders to gain experience, develop trading skills, and test different strategies before committing to live trading. You can record your hypothetical trades on paper or use a trading simulation program. Many online brokerages and trading platforms, such as TradingView and Moomoo, offer paper trading as a built-in feature.

Demo Accounts

Demo accounts are another way to practice trading without risking real money. Most brokers supported on TradingView provide demo accounts that can be used for trading. To use a demo account, you must first create one on the broker's website and then select the broker in the bottom Trading Panel of your chart. You can then log in using your demo account credentials.

TradingView's Long and Short Position Drawing Tools

TradingView also offers Long and Short Position drawing tools that allow you to estimate how an order will perform if you go long or short. You can input your initial account size and risk amount, and the tool will show you the position size and account balance when positions are closed after reaching either the Take Profit or Stop Loss level. This feature lets you practice placing orders and seeing results without actually placing them, helping you build confidence and knowledge before entering the market.

Investing.com's Social Trading Community

Investing.com maintains a social trading community that tracks live and demo accounts, including a leaderboard and detailed tables of trading activity. By using these demo accounts, investors can explore long positions without committing personal capital.

By utilising these tools and features, you can practice placing orders, test strategies, and gain experience in a safe environment before entering the market with real money.

The tool takes account size, risk percentage and entry price as inputs

The long position tool is a feature that allows investors to estimate the outcome of an order if they go long or short. It shows the Profit & Loss (PnL) and estimates the risk and closing account balance when the price reaches the profit target or stop-loss levels.

To use the long position tool, investors need to provide specific inputs, including the account size, risk percentage, and entry price. Here's a step-by-step guide on how to utilise this tool:

• Create a Long Position Drawing: Start by creating a long position drawing or short position drawing, depending on your intended strategy. This step involves selecting the instrument you want to trade.
• Input Initial Account Size and Risk Amount: In the properties dialog of the chosen instrument, enter your initial account size. You can input the risk amount in absolute numbers or as a percentage of your account size. For example, if your account size is $5,000 and you want to long VOO at $405 with a 2% risk, the risk amount would be $100.
• Specify Lot Size (Optional): You may also have the option to enter the Lot Size. This represents the number of units of the instrument you intend to trade. Click "OK" or "Accept" to finalise the input process.
• Review Position Size and Account Balance: Once you've entered the required information, the long position tool will display the position size and the estimated account balance when positions are closed after reaching either the Take Profit or Stop Loss level.

It's important to note that the long position tool may not always indicate if you've exceeded your account size. Therefore, it's prudent to manually verify the total amount to ensure you don't spend beyond your available capital. Additionally, consider using online calculators that show your "involved capital" in percentage terms to help monitor your position size relative to your account size.

By utilising the long position tool with these inputs, investors can gain valuable insights into the potential outcomes of their trades, helping them make more informed decisions and manage their risk effectively.

The long position tool can be used to estimate profit and loss

To use the Long Position tool to estimate profit and loss, follow these steps:

• Create a Long Position drawing by setting an entry point and assuming a long position from that point.
• In the properties dialog of the instrument, enter your initial account size and risk amount. You can enter these values either in absolute numbers or as a percentage of your account size. You can also enter the Lot Size. Click OK to accept.
• The drawing tool tags will now show you the position size and account balance when positions are closed after reaching either the Take Profit or the Stop Loss level.
• The Long Position tool allows you to manually adjust the profit and loss zones to change the risk/reward ratio. You can also manually enter the desired profit target and stop-loss levels using ticks or exact prices.
• The tool will display the profit and loss zones, with the profit zone typically represented in green and the loss zone in red. You can change the colours and thickness of the line separating these zones.
• By using the Long Position tool, you can estimate the profit or loss of your trade before placing any actual orders. This helps you gain confidence and knowledge before risking real money in the markets.

In summary, the Long Position tool on Investing.com provides a valuable feature for investors to estimate potential outcomes of their trades, helping them make more informed decisions and better manage their risk.

Frequently asked questions