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 of any part of the trading system, and most traders do not realize how important it is.
It is important to realize the concept of capital management, and understand the difference between it and trading decisions, capital management determines the amount you would use in a single process, and the extent of risk that will accept them in this process.
There are different systems in the management of capital, all designed to preserve capital and be 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 depends completely, you will here explain one of the System Capital Management, which proved an annual return high with limited risk, and we'll use the example at the expense of normal, the amount of ( $ 100,000) and leverage (1:100), example and can be measured on any other account a smaller or larger.
Capital management system
That your risk for each trade should not exceed (3%) loss of capital in the process one, 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 in a single operation.
If you are a short-term traders and put a 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 ($ 2,000) only, which is equivalent to (2%) from the top money.
If you are a medium-term traders or long term, and put a stop loss (200) points, calculated Kalmthal Previous:
2000 $ ÷ 200 points = $ 10 for each point, this means entering one contract only, If you do stop-loss - God forbid - it means that your loss is ($ 2,000) 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 - small), 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, would 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 compensate for the loss of the previous, so you can blow up the capital in a short time.
The shops are never allowed uncontrolled emotions of greed or control 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 to a pair (5 decades as in the previous example), the available margin would be ($ 95,000), if you want to enter other 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 the process of third less and less.
It is important to have diversification of operations between pairs less tied to the movement.
For example: If you have a (long - buy) in the pair (EUR / USD) must not enter on (GBP / USD) due to their close association in the movement, and it entered a pejorative 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 operation saved what Wagih
It is very important to understand the difference between these two Alastratej Witten.
The Strategy First (gambling), based on a doubling of risk after the losses, which are based on a fake says: After three or four losses, the biggest opportunity in the next process to be profitable, so you need to double the risk to compensate for past losses.
The truth, however, says: Regardless of the outcome of the previous process; the opportunity in each process is (50:50).
If you have five consecutive losing operations, the chance of success of the operation is as 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, lost four losses in a row (4000 $), and remained of the score (6000 $), will think that stores a novice, 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 is that if the rest of the lost (4000 $) and remained from his account (2000 $), it is extremely difficult - if not impossible - to refer to the opening balance ($ 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.
The Strategy (the process), says:
Lift your risk whenever you win (Khater profits), and your risk is reduced whenever lost (Keep on capital)
It means that stores must modify the number of contracts to Mtagerth based on profits or Khosarath recent years.
For example:
Shops (a) began with (100,000 $), and introduces five decades, and after several months reached its total to ($ 150,000), increasing the number of contracts to seven or eight decades.
Shops (b) like him started with ($ 100,000) and enter the five decades, and the score reached after several months (80,000 $), thereby reducing the number of contracts to four decades.
High-yield strategy
This is the Strategy 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).
article source in arabic: http://www.okayforex.com/vb/showthread.php?t=194
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 of any part of the trading system, and most traders do not realize how important it is.
It is important to realize the concept of capital management, and understand the difference between it and trading decisions, capital management determines the amount you would use in a single process, and the extent of risk that will accept them in this process.
There are different systems in the management of capital, all designed to preserve capital and be 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 depends completely, you will here explain one of the System Capital Management, which proved an annual return high with limited risk, and we'll use the example at the expense of normal, the amount of ( $ 100,000) and leverage (1:100), example and can be measured on any other account a smaller or larger.
Capital management system
That your risk for each trade should not exceed (3%) loss of capital in the process one, 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 in a single operation.
If you are a short-term traders and put a 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 ($ 2,000) only, which is equivalent to (2%) from the top money.
If you are a medium-term traders or long term, and put a stop loss (200) points, calculated Kalmthal Previous:
2000 $ ÷ 200 points = $ 10 for each point, this means entering one contract only, If you do stop-loss - God forbid - it means that your loss is ($ 2,000) 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 - small), 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, would 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 compensate for the loss of the previous, so you can blow up the capital in a short time.
The shops are never allowed uncontrolled emotions of greed or control 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 to a pair (5 decades as in the previous example), the available margin would be ($ 95,000), if you want to enter other 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 the process of third less and less.
It is important to have diversification of operations between pairs less tied to the movement.
For example: If you have a (long - buy) in the pair (EUR / USD) must not enter on (GBP / USD) due to their close association in the movement, and it entered a pejorative 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 operation saved what Wagih
It is very important to understand the difference between these two Alastratej Witten.
The Strategy First (gambling), based on a doubling of risk after the losses, which are based on a fake says: After three or four losses, the biggest opportunity in the next process to be profitable, so you need to double the risk to compensate for past losses.
The truth, however, says: Regardless of the outcome of the previous process; the opportunity in each process is (50:50).
If you have five consecutive losing operations, the chance of success of the operation is as 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, lost four losses in a row (4000 $), and remained of the score (6000 $), will think that stores a novice, 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 is that if the rest of the lost (4000 $) and remained from his account (2000 $), it is extremely difficult - if not impossible - to refer to the opening balance ($ 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.
The Strategy (the process), says:
Lift your risk whenever you win (Khater profits), and your risk is reduced whenever lost (Keep on capital)
It means that stores must modify the number of contracts to Mtagerth based on profits or Khosarath recent years.
For example:
Shops (a) began with (100,000 $), and introduces five decades, and after several months reached its total to ($ 150,000), increasing the number of contracts to seven or eight decades.
Shops (b) like him started with ($ 100,000) and enter the five decades, and the score reached after several months (80,000 $), thereby reducing the number of contracts to four decades.
High-yield strategy
This is the Strategy 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).
article source in arabic: http://www.okayforex.com/vb/showthread.php?t=194
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