Capital Protection Group

Subject preservation of capital can be divided into two hotel’s category. The first category protects the initial capital, whereas the second is responsible for the protection of the revenue already in the process of its enlargement. If you have not done a job of protecting the initial capital, you can not introduce the possibility of protecting profits. Speaking of income, the first thought that comes to mind 90% of traders – protection of income in a single winning trade. They want to know at what point the record profits from the transaction, and when to hold a profitable position. This topic is certainly worthy of discussion and consideration, but it is not the subject of this article. When I speak about the protection of income in this article, I mean the profits from all transactions. For example, starting with the account, and reaching 000, 000, what steps should be taken to make sure that the account does not “fall through” back to, 000. This is exactly what I will discuss in this article.
Protection of seed capital.
This is something with which to begin …
What was thought to Markets? I spent quite a lot of research and discovered one of the most brilliant professional secrets. I do not have to worry about protecting the initial capital, because I’m going to make a fortune. The saddest thing is that only the beginning, they “merge” its own expense during the first 36 hours, each time repeating the same mistake. Neglecting the protection of seed capital.
Once, I was approached by a trader, who had (I emphasize the word “had”) 0,000 of capital to start trading. He was going to sell Daily S & P. He asked me, with a number of contracts to start trading. I asked him, “Were you ever Daily trading on the S & P?”, “No”. “Has you the necessary research?”, “I think so. My answer was the same as it was and will always, regardless of the answers to these two questions, one. Start with the one contract. The only reason that I asked him about was that I knew that he would oppose that, to trading only one contract with an initial score of 0,000. So, I just tried to convince him to start with one contract. He began to trade with the eight. A month later, he called me. His bill slipped to 0,000 from 0,000. He decided that if he loses money, it is necessary to increase the number of traded contracts! This may be a topic for another article. Nevertheless, he called me and told me what had happened and asked what to do now? I said – trading one contract. It was an expensive lesson.
The first rule of protection of seed capital – always start trading with one contract, minimum lot of shares, or one option. No matter what the initial capital you have, how much research you conducted, what results were obtained on historical data. Start with the minimum. Starting with the minimum you can give a method to prove its efficiency, before the risks increase. (See “Power of proper money management”).
The second rule of protection of seed capital – not “peretorgovyvat” one contract too many markets. If at some point you are close to the probability of margin-Cola, then you are “overloading” your account. Sometimes it can be waived, depending on the account that you have, or the goals it has set for itself. For example, I have a funny dream – beat the record trade Larry Williams. Will I be it ever do, God only knows. But every time I try and put the entire competition account of, 000 at the starting line. The reason is a consequence of the greatness of purpose, which stands in front of me. Others can only work with a score of, 000. Virtually impossible to completely avoid stress and still be able to adequately increase the account. However, if you have the opportunity to have some margin between the initial score and the minimum margin requirement after deducting the three maximum drodaunov received on historical data – is a good start.
On the other hand, little account is the fine line between “peretorgovley” accounts and building a reasonable position. If in doubt, take the conservative side. Better be careful what crazy to have a chance to stay here until next year.