📄 Did you know that most traders lose their money due to poor capital management?
◀️ We will raise some important points:
⚙️ Building a portfolio is like building a house. It requires searching for the right place, then building the foundations, then finishing...etc. Whether you have $100 or a million, you must follow a scientific approach to capital management.
In this article, we will present to you in detail:
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• How to enter into deals
❶ Select capital that you do not need.
❷ Set portfolio goals.
❸ Risk management.
❹ A clear trading plan.
I always talked about entering in parts (DCA), which is an aggregate entry within a range of several prices in different quantities.
➫ Ways to make profit:
❶ Divide the sale equally by each target, raising the stop loss whenever a target is achieved to reserve profit.
❷ Sell half the quantity (or your capital in the deal) at the first target, for example, then risk the rest of the quantity with a stop loss upon your entry.
❸ Trailing stop loss Raise the stop loss as the price rises to secure profit.
➫How to avoid portfolio losses:-
❶ Divide the capital into several parts. Never enter all your money into one deal, no matter the temptations.
❷ Trade with 10%. Lose 1% of your trades, which represents 0.1% of the portfolio size.
❸ A 5% loss to the portfolio represents (stop what you are doing).
➫ Protect your capital
➫ Your top priority is to preserve the principal and then the profits will come later. Do not take risks, do not take risks.
Before deciding to enter into the deal
➫Calculate the percentage of loss and its impact on your portfolio
➫ Loss size = deal loss percentage x deal budget
➫ Portfolio loss ratio = Loss size ÷ Portfolio size
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