Tfdiloh
How to manage capital
Capital Management
Capital management is a critical point that shows difference between winners and losers, we have proved that if there is (100) stores Aptdaua their trading using a system a success rate (60%), it is only (5) traders winners at the end of the year, apart from the (60 %) success rate of the trading system; the (95%) of traders will lose because of poor capital management.
The capital management is informed part in any trading system, and most traders do not realize how important it is.
It is important to recognize the concept of capital management, and understand the difference between it and trading decisions, capital management determines the amount that you will use in a single transaction, and the extent of risk that will accept them in this process.
There are different systems in the management of capital, all of which aim to preserve capital and not exposed to high risk.
First of all you need to understand the base (core balance) or (Margin), namely:
The core of the opening balance = balance - the amount used in the processes that are open.
If the balance is for example (10,000 $), and entered the process of trading in B (1000 $), the (core balance) or (Margin) is (9000 $), if entered into a further process of $ (1000 $) again, the (core balance) or (Margin) is (8000 $).
It is important to understand the meaning of (core balance) or (Margin), including the management of capital depend on it completely, you will here explain one of the systems management of capital, which proved an annualized return of high with limited risk, and we'll use the example at the expense of normal, the amount of ( $ 100,000) and leverage (1:100), and the example can be measured on any other account a smaller or larger.
System Capital Management
That your risk for each trade should not exceed (3%) loss of the capital in a single transaction, and it would be better if the adjusted ratio to (1%) or (2%), and we prefer that the ratio of risk (1%), but If you're confident in your trading; you can raise the ratio to (3%).
We will take the average percentage (2%) to explain the
2% of the capital in the example = (100,000 $) * (0.02) = (2000 $).
So you have to modify the stop loss so as not to lose more than that in a single transaction.
If you are a Mtajery short-term and put the stop loss, for example (40) points, calculated as follows:
2000 $ ÷ 40 points = $ 50 per point, and that means access to five decades (5 Lots), if you do stop-loss - God forbid - it means that your loss is (2000 $) only, which is equivalent to (2%) from the top money.
If you are a Mtajery the medium term or long term, and put a stop loss (200) points, of example calculated above:
2000 $ ÷ 200 points = $ 10 for each point, and that means entering a contract and only one, if you do stop-loss - God forbid - it means that your loss is (2000 $) only, which is equivalent to (2%) of the capital.
This is just an example, and varies according to the capital, and the account type (normal - miniature), and the amount of leverage, but the most important things is to focus on the base rate risk, not risk never by more in a single operation, will be a calamity great if the store has lost three or four operations in succession, then firmly Sisawrh feeling that the next process will be successful and that the multiplication by the number of contracts to offset the previous loss, so you can blow up the capital in a short time.
The store does not allow uncontrolled emotions or never for greed to control the Mtagerth.
Diversification
Trading in the currency pair and one gives entry signals are few and far between, it is better to diversify trading for a number of currency pairs.
If you have an account ($ 100,000), as in the previous example, and you have an open process on a pair specific (5 decades, as in the previous example), the available margin would be ($ 95,000), if you want to enter another process calculated the proportion of risk on the basis of the margin available , and therefore there is no risk (by example) more than (1900 $) in the new process, and so on for the third process less and less.
It is important to have diversification of operations between the currency pairs in less tied to the movement.
For example: If you have a (long - purchase) in a pair (EUR / USD) is not required to enter on (GBP / USD) due to their close association in the movement, and it Vkonk entered by doubling the risk.
If you want access to my husband and Pound Euro U.S. dollars at the same time, you risk ratio by dividing the two processes as if they were a single operation, and the division ratio (2%) on them; Vtkon (1%) for each of them.
Between strategy and gambling Alastruta Wagih process
It is very important to understand the difference between these two Alastratej Witten.
Alastratej Ye First (gambling), based on a doubling of risk after losses, and is based on the base of the fake says: After three or four losses, the biggest opportunity in the next operation to be profitable, so you need to double the risk of losses to make up for years.
The truth, however, says: Regardless of the outcome of the previous operation; the opportunity in every process is (50:50).
If you have five consecutive losing operations, the chance of success of the process is what it is the sixth (50:50).
This misconception is composed of many beginners in trading, for example:
If a store of $ (10,000 $), for example, and lost four losses in a row (4000 $), and the Left tally (6000 $), will think that stores a novice, that his chances of success in the fifth largest consequently, will increase the proportion of risk four times to cover the losses the former, and the problem that if the rest of the lost (4000 $) and remained from his account (2000 $), it is very difficult - if not impossible - refer to the opening balance (10,000 $).
The shops disciplined, you should not use this type of gambling account only if he wants to lose its score in a short time.
Alastratej Yeh (the process), says:
Upload your risk whenever you win (Khater profits), and your risk is reduced whenever lost (Keep the capital)
It means that stores must adjust the number of contracts to Mtagerth based on profits or Khosarath recent years.
For example:
Shops (a) began with (100,000 $), and introduces five decades, and several months later arrived to score (150,000 $), increasing the number of contracts to seven or eight decades.
Shops (b) like it started with ($ 100,000) and enter the five decades, and the score reached after several months (80,000 $), thereby reducing the number of its contracts to four decades.
High-yield strategy
Ye Alastratej this is for those traders who are looking for a big return, while maintaining the opening balance.
Based on the rules of your management of capital, should not exceed the percentage of risk (2%), if started with a capital (10,000 $), for example, by trading and risk (1%) After a year will be the balance (15,000 $).
Now you become the opening balance plus the full (50%) profit, now you can increase your profits will be the same risk more than the profit that your risk is limited to the opening balance.
Means that the risk in the same proportion (1-2%), but of the entire new balance.
This way you will get the chance of greater return at the same time you are still in the proportion of low risk to the opening balance.
How to manage capital
Capital Management
Capital management is a critical point that shows difference between winners and losers, we have proved that if there is (100) stores Aptdaua their trading using a system a success rate (60%), it is only (5) traders winners at the end of the year, apart from the (60 %) success rate of the trading system; the (95%) of traders will lose because of poor capital management.
The capital management is informed part in any trading system, and most traders do not realize how important it is.
It is important to recognize the concept of capital management, and understand the difference between it and trading decisions, capital management determines the amount that you will use in a single transaction, and the extent of risk that will accept them in this process.
There are different systems in the management of capital, all of which aim to preserve capital and not exposed to high risk.
First of all you need to understand the base (core balance) or (Margin), namely:
The core of the opening balance = balance - the amount used in the processes that are open.
If the balance is for example (10,000 $), and entered the process of trading in B (1000 $), the (core balance) or (Margin) is (9000 $), if entered into a further process of $ (1000 $) again, the (core balance) or (Margin) is (8000 $).
It is important to understand the meaning of (core balance) or (Margin), including the management of capital depend on it completely, you will here explain one of the systems management of capital, which proved an annualized return of high with limited risk, and we'll use the example at the expense of normal, the amount of ( $ 100,000) and leverage (1:100), and the example can be measured on any other account a smaller or larger.
System Capital Management
That your risk for each trade should not exceed (3%) loss of the capital in a single transaction, and it would be better if the adjusted ratio to (1%) or (2%), and we prefer that the ratio of risk (1%), but If you're confident in your trading; you can raise the ratio to (3%).
We will take the average percentage (2%) to explain the
2% of the capital in the example = (100,000 $) * (0.02) = (2000 $).
So you have to modify the stop loss so as not to lose more than that in a single transaction.
If you are a Mtajery short-term and put the stop loss, for example (40) points, calculated as follows:
2000 $ ÷ 40 points = $ 50 per point, and that means access to five decades (5 Lots), if you do stop-loss - God forbid - it means that your loss is (2000 $) only, which is equivalent to (2%) from the top money.
If you are a Mtajery the medium term or long term, and put a stop loss (200) points, of example calculated above:
2000 $ ÷ 200 points = $ 10 for each point, and that means entering a contract and only one, if you do stop-loss - God forbid - it means that your loss is (2000 $) only, which is equivalent to (2%) of the capital.
This is just an example, and varies according to the capital, and the account type (normal - miniature), and the amount of leverage, but the most important things is to focus on the base rate risk, not risk never by more in a single operation, will be a calamity great if the store has lost three or four operations in succession, then firmly Sisawrh feeling that the next process will be successful and that the multiplication by the number of contracts to offset the previous loss, so you can blow up the capital in a short time.
The store does not allow uncontrolled emotions or never for greed to control the Mtagerth.
Diversification
Trading in the currency pair and one gives entry signals are few and far between, it is better to diversify trading for a number of currency pairs.
If you have an account ($ 100,000), as in the previous example, and you have an open process on a pair specific (5 decades, as in the previous example), the available margin would be ($ 95,000), if you want to enter another process calculated the proportion of risk on the basis of the margin available , and therefore there is no risk (by example) more than (1900 $) in the new process, and so on for the third process less and less.
It is important to have diversification of operations between the currency pairs in less tied to the movement.
For example: If you have a (long - purchase) in a pair (EUR / USD) is not required to enter on (GBP / USD) due to their close association in the movement, and it Vkonk entered by doubling the risk.
If you want access to my husband and Pound Euro U.S. dollars at the same time, you risk ratio by dividing the two processes as if they were a single operation, and the division ratio (2%) on them; Vtkon (1%) for each of them.
Between strategy and gambling Alastruta Wagih process
It is very important to understand the difference between these two Alastratej Witten.
Alastratej Ye First (gambling), based on a doubling of risk after losses, and is based on the base of the fake says: After three or four losses, the biggest opportunity in the next operation to be profitable, so you need to double the risk of losses to make up for years.
The truth, however, says: Regardless of the outcome of the previous operation; the opportunity in every process is (50:50).
If you have five consecutive losing operations, the chance of success of the process is what it is the sixth (50:50).
This misconception is composed of many beginners in trading, for example:
If a store of $ (10,000 $), for example, and lost four losses in a row (4000 $), and the Left tally (6000 $), will think that stores a novice, that his chances of success in the fifth largest consequently, will increase the proportion of risk four times to cover the losses the former, and the problem that if the rest of the lost (4000 $) and remained from his account (2000 $), it is very difficult - if not impossible - refer to the opening balance (10,000 $).
The shops disciplined, you should not use this type of gambling account only if he wants to lose its score in a short time.
Alastratej Yeh (the process), says:
Upload your risk whenever you win (Khater profits), and your risk is reduced whenever lost (Keep the capital)
It means that stores must adjust the number of contracts to Mtagerth based on profits or Khosarath recent years.
For example:
Shops (a) began with (100,000 $), and introduces five decades, and several months later arrived to score (150,000 $), increasing the number of contracts to seven or eight decades.
Shops (b) like it started with ($ 100,000) and enter the five decades, and the score reached after several months (80,000 $), thereby reducing the number of its contracts to four decades.
High-yield strategy
Ye Alastratej this is for those traders who are looking for a big return, while maintaining the opening balance.
Based on the rules of your management of capital, should not exceed the percentage of risk (2%), if started with a capital (10,000 $), for example, by trading and risk (1%) After a year will be the balance (15,000 $).
Now you become the opening balance plus the full (50%) profit, now you can increase your profits will be the same risk more than the profit that your risk is limited to the opening balance.
Means that the risk in the same proportion (1-2%), but of the entire new balance.
This way you will get the chance of greater return at the same time you are still in the proportion of low risk to the opening balance.
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