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Capital

What Is Capital Partitioning ? How will it help you as a trader?Hi everyone: Let's talk about capital partitioning, which is a risk management approach for consistent traders to utilize to allow them to leverage their capital. You may ask what exactly is capital partitioning ? well to simply put it in words, it is basically divide up your trading $ in the current trading account into 2 or more sub accounts. So what's the point of doing that you may ask ? Well, with leverage, a consistent trader does not require to have their entire money deposit into one trading account. They can allocate the asset into different trading accounts to reduce risk as well as trading different markets available Let's take a look here: Say I have a $100,000 trading capital. I understand risk management, trading psychology, and will not over trade, over risk and revenge trade. Hence, it's in my best interest to divide the $ in this account into a different accounts, or simply in a liquid-able account such as a savings account, stocks, bond..etc Here are a few scenarios that you can implement into your trading accounts. Understand that the % to allocate, what other trading accounts to deposit $ into, and how to move around the $ is totally up to you as a trader. The most important is to make sure you are a consistent trader before you approach this type of method. As more accounts you divide your capital into, the more % you will need to risk per account as you need to open bigger position sizes now. Any questions, comments, or feedback welcome to let me know. Thank you I will share other risk management educational videos that can be helpful for you. Risk Management: When/How to move SL to BE and to profit in a running trade ? Risk Management: How to filter trading opportunities if multiple setups are presenting entries: Risk Management: 3 different entries on how to enter the impulsive phrase of price action Risk Management 101 Risk Management: How to set a Take Profit (TP) for your trades Risk Management: How to Enter and set SL and TP for an impulse move in the market Risk Management: How to scale in the impulsive phrase of the market condition? Risk Management: Combine everything you learn to prevent blowing a trading account
BITSTAMP:BTCUSDEducation
by jojofang0901
28
don't worry about your losses what happens if you have a 1:1.5 risk reward ratio(means if you win you won 1/5% of your balance if you lose you lost1% of your balance) and doing 2 trade via any strategy that you prefer in a day (means your open trades should not be more than 2 at the same time). at the end of the month, you do 40 trades so we see below what happens(20 days * 2 trades = 40 trade in a month): ---------------------------------------------------------------------------------------------------------------------- if you win 40 trades and lost no trades you make 60% in a month (40*1/5)-(0*1)=60-0=60% if you win 35 trades and lost 5 trades you make 47/5% in a month (35*1/5)-(5*1)=52/5-5=47/5% if you win 30 trades and lost 10 trades you make 35% in a month (30*1/5)-(10*1)=45-10=35% if you win 25 trades and lost 15 trades you make 22/5% in a month (25*1/5)-(15*1)=37/5-15=22/5% if you win 20 trades and lost 20 trades you make 10% in a month (20*1/5)-(20*1)=30-20=10% if you win 15 trades and lost 25 trades you miss -2/5% in a month (15*1/5)-(25*1)=22/5-25=-2.5% if you win 10 trades and lost 30 trades you miss -15% in a month (better change your strategy) (10*1/5)-(30*1)=15-30=-15% if you win 5 trades and lost 35 trades you miss -27/5% in a month (better change your strategy) (5*1/5)-(35*1)=7/5-35=-27/5% if you win no trades and lost 40 trades you miss -40% in a month (better change your strategy) (0*1/5)-(40*1)=0-40=-40% ----------------------------------------------------------------------------------------------------------------------- Now we average results: (60+47/5+35+22/5+10-2/5-15-27/5-40)/9=10% On average you can make 10% a month At the first sight you may tell yourself how I am going to be rich with only 10% monthly so please attention to below and see what happens if you start with 5000$ 1) 5000*1/10=5500$ 2) 5500*1/10=6050$ 3) 6050*1/10=6655$ 4) 6655*1.10=7320$ 5) 7320*1.10=8052$ - - 12) 15,692$ - - 24) 49,248$ - - 36) 154,563 - - 48) 485,086$ - 56) 1,039,825$ Congratulations!!! Now you are a millionaire after about 4/5 years of hardworking patience and discipline This why we should not be afraid of our losses GOOD LUCK Abolfazl Abedi
Education
by abolfazlabedi
Money Management 101SELF DEVELOPMENT/METHODOLOGY/PSYCHOLOGY Money Management 101 Are you receiving a win-rate of more then 60% and still loosing money?? Money Management may be an area that you need to focus on. It is an essential element in becoming a professional trader. Listed below are 4 Simple Steps To Evaluate Your Financial Health; 1. Position Sizing A portfolio of $... and I decide to only risk 2% on a trading strategy 2. Capital - How much? A portfolio of $.... 3. Loss - How much? I must be right more then 50% of the time, but win more money on winning trades versus losing trades. I will use stops and limits to enforce a risk/reward ratio of 1:2 or higher 4. Profits - What? A profit/loss ratio refers to the size of the average profit compares to the size of the average loss per trade. For example, if your expected profit is $1500 and your expected loss is $500, the P/L ratio is 3:1 Please let me know if you have any questions :) Happy Trading "The simpler it is, the better i like it" Peter Lynch
TVC:GOLDEducation
by SMPTrader