medium · Volume Spread Analysis climaxes-tests-springs-upthrusts

A trader manages a portfolio of $250,000 and applies a risk management rule of 1% per trade.

If a long entry is identified at $42.00 based on a successful test, and the stop-loss is placed at $39.50, how many shares should be purchased?

  1. 1,000 shares
  2. 2,500 shares
  3. 625 shares
  4. 5,952 shares

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