Deposit Management and Capital Management - Page 12
Page 12 of 209 FirstFirst ... 289101112131415162262112 ... LastLast
Results 111 to 120 of 2083

Thread: Deposit Management and Capital Management

  1. #1
    Trader rinaji's Avatar
    Join Date
    May 2013
    Posts
    3,839
    Thumbs Up
    Received: 207
    Given: 311

    Deposit Management and Capital Management

    Today I made ​​a light topic to discuss, about trade using a stop loss or cut loss. We have too much discussion about the importance of stop loss and risk management, it is 100% true, we must agree that the stop loss and risk management is essential to minimize the risk.

    Do you agree with this...

    No Stop Loss = No Risk Management?

    It is a simple and easy question to answer, maybe we will find many traders who agree with the above sentence.

    But ...., should not be so, money management is not only for the balance in the account, but for all of our capital, (on the account, in payment processor, in the Bank, or in your pocket, and others). At its core is the management of all of your capital.

    I've been trading with risking 100% of deposits, but I have a risk management, yes of course.

    Suppose I have a $ 1,000 capital.
    I have a trade plan with a maximum risk of 10% (of the total capital) per trade. That means I take $ 100 risk for each trade position.

    Well, in general, we will use this way ....
    We made ​​a $ 1,000 deposit. We use a stop loss or cut losses when equity was reduced by $ 100 or 10%. It is a common way. And other people will think that we are really good in applying risk management. Of course...

    So what if we do this way ...
    We split our capital into 10 deposit @ $100. We made ​​a $ 100 deposit, the remainder ($ 900) is stored in the payment processor, or bank, or our pockets. And we do the trade without a stop loss / cut loss. If we get stopped out, then we make a new deposit ($ 100), and so on.
    Perhaps some people may believe we are risking 100%, yes we understand them, because they only see from the management of deposits, not capital management.

    Conclusion: Do not think that risking 100% deposit is mean without risk management. So if you see me getting stop out (usually I trade without a stop loss), you do not think that I am risking 100% of capital. I am only risking 100% of deposits. This could mean only risking 10% of my capital, or 5% capital, because I always split the deposits into multiple parts.

    Another example:
    Suppose I have $ 1,000. and I split into 10 deposits @ $ 100. Well, if I set 10% risk (of the initial balance) per trade. Or $ 10 per trade. This means that we set 1% risk (of total capital) per trade. Equivalent to $ 10.
    10% risk of initial balance ($ 100) = 10% * $ 100 = $ 10. This is if we calculate in deposit management.
    1% risk of total capital ($ 1,000) = 1% * $ 1,000 = $ 10. This is if we calculate in capital management.

    It is a simple way to understand capital management, maybe I'll make a topic about cash flow management in the other thread. I think we should actually do forex trading as a professional business, not just about market analysis.

    Not allowed!
    If you lose, be patient. If you win, stay humble

  2. #111
    Trader rinaji's Avatar
    Join Date
    May 2013
    Posts
    3,839
    Thumbs Up
    Received: 207
    Given: 311
    Quote Originally Posted by bilibili View Post
    If we don't use stop loss that means we use margin call to stop our loss:).In some broker that means 100% of our total capital.Let's suppose we open as large positions as we can,if our capital is 1000$,we open a position with 900$,so if we lose 100$ we'll be forced to stop loss by the broker automatically,which we only lose 100$,we still can start our trading again.
    That is why we need to understand the function of leverage, and I strongly agree with your opinion, a margin call is not that we will lose all the margin always. But it depends on the leverage wich are used. And also may depend on the lot size which are used. While there is a missconception about the understanding of the margin call among many retail traders.
    Quote Originally Posted by mannan View Post
    [lang=zh-CN]some information looks like same but in real that is not same.there is huge difference difference between this two.such as deposit management and capital management.deposit management is that things where a trader use his balance so carefully and capital management means where a trader knowledge and skill for doing better things by using all asset.[/lang]
    Exactly,,,mate, Here I divide money management into two, deposit management and capital management, you already know that capital management is for all the assets of our money, and deposit management is a part of capital management.
    Quote Originally Posted by Hukam View Post
    Its very clear sense that we have to not take much high risk in trading just try to keep your trading system less risky some traders think that if they will invest less amount like USD 100 then will able to do good trading but they because of high risk trading they loose that amount within one day in forex so no matter you are investing USD 100 or USD 1000 in forex proper money managemnet is essential
    Yep, money management is inclusive of art and knowledge, it is important in a business. It is the lifeblood of business.

    Not allowed!
    If you lose, be patient. If you win, stay humble

  3. #112
    Trader
    Join Date
    Jul 2014
    Posts
    261
    Thumbs Up
    Received: 1
    Given: 0
    [lang=id]a solution that is appropriate for our select determines a trade where we could set up and properly take into account our capital and our trade business in determining where we could use a good money management which is certainly very useful for trade and profit maybe we can get in this business[/lang]

    Not allowed!

  4. #113
    Banned
    Join Date
    Jul 2014
    Posts
    9,665
    Thumbs Up
    Received: 126
    Given: 104
    [lang=id]i used this methods, mean, margin call is my stop loss, i always divide my capital for trading forex, not to use all of them, but of course, this is the consequences which i have to take, no problem and as long as we understand for what we have to do and done, so i always set the leverage with high setting, it is necessary for me to get enough margin to sustain my order[/lang]

    Not allowed!

  5. #114
    Registered user
    Join Date
    Aug 2014
    Posts
    1,349
    Thumbs Up
    Received: 28
    Given: 1
    Its all do fall down in money management. In money management our main goal is to preserve our trading capital. So its best really to trade just 2% of our trading capital. At least we can do 50 trades if we only going to trade 2% of our trading capital. I do believe that I can really build my trading account without any problem right now.

    Not allowed!

  6. #115
    Trader rinaji's Avatar
    Join Date
    May 2013
    Posts
    3,839
    Thumbs Up
    Received: 207
    Given: 311
    Quote Originally Posted by budado View Post
    Its all do fall down in money management. In money management our main goal is to preserve our trading capital. So its best really to trade just 2% of our trading capital. At least we can do 50 trades if we only going to trade 2% of our trading capital. I do believe that I can really build my trading account without any problem right now.
    A good way of you, I'm sure you can get good results if you have that good money management, 2% risk is very safe. It is a good way to reduce the effects of psychologically, it will go well if we always discipline in the plan and consistent with the plan of money management. I believe with your low risk strategy, that will give you a good income.

    Not allowed!
    If you lose, be patient. If you win, stay humble

  7. #116
    Registered user
    Join Date
    Aug 2013
    Posts
    2,526
    Thumbs Up
    Received: 15
    Given: 56
    Quote Originally Posted by rinaji View Post
    A good way of you, I'm sure you can get good results if you have that good money management, 2% risk is very safe. It is a good way to reduce the effects of psychologically, it will go well if we always discipline in the plan and consistent with the plan of money management. I believe with your low risk strategy, that will give you a good income.
    I believe that when we apply a risk only 2% of our trade then this would have been completely safe for us, although perhaps by implementing risk management only 2% of our trade will benefit low in this trade, but for the safety of our accounts then it should be we use a low risk so that we can achieve consistent profits in this trade and just need to take more capital for profit-making greater volumes

    Not allowed!

  8. #117
    Trader
    Join Date
    Jul 2014
    Posts
    159
    Thumbs Up
    Received: 0
    Given: 0
    it should be a good balance in a trade where we have to understand the risks and benefits in a business other than that we learn to analyze and determine the price is well and right for us and we do get to create profits in this business

    Not allowed!

  9. #118
    Trader
    Join Date
    Aug 2014
    Posts
    13
    Thumbs Up
    Received: 0
    Given: 0
    it is common way and other people will think tat. we are really good in applying risk management. forex trading without money management is not a business. But expert treader is can possibly expert in analysis. this means that we set 2% risk per tread. 10% risk balance 100$ or 1% risk balance 10$. i will make a topic about cash flow management in the other tread.

    Not allowed!

  10. #119
    Trader rinaji's Avatar
    Join Date
    May 2013
    Posts
    3,839
    Thumbs Up
    Received: 207
    Given: 311
    Quote Originally Posted by srikandi805 View Post
    by making a small risk management will facilitate the trade deal at the time of the transaction, with only risking 2%, I think it is very good so that financial management be easily managed by the trade gains would be had we
    yes there right. taking 2 percent of risk in each trade is a good way. Because we divide our total margin into 50 transactions. And the main reason is we can keep our emotional control very well. Because low risk creating will always far from psychological pressure.

    Not allowed!
    If you lose, be patient. If you win, stay humble

  11. #120
    Trader
    Join Date
    Sep 2014
    Posts
    24
    Thumbs Up
    Received: 0
    Given: 0
    Anyone declare that you simply consider 10% possibility on your industry. It really is too large for me. Downpayment 100USD along with taking potential decline 10USD. That mean 10% possibility. Dependant on funds manegement you can not put possibility too big. Simply because time to restore the loss. The more even bigger decline percent each industry, generating long time to get better.

    Not allowed!

Page 12 of 209 FirstFirst ... 289101112131415162262112 ... LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •