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| The
Capital necessary for trading | | |
| | | In order to
do trading, money is required, but to a smaller extent than many may think. | | What we can
achieve, above all, are results that allow us to make a fortune in a relatively
short amount of time (See
William Delbert GANN’s bibliography) | | Anyway, please
remember that one can also ruin oneself by a bad management of one’s money....and,
mind, even knowing analysis and anything related. | | To avoid that,
the following is needed: |
- Fix how
much capital you can assign to the market, and forget about it.
- Build a
system that allows the capital to accrue.
- Manage money
appropriately so as to check the volumes
|
| To learn my
method, you can operate in day trade or in swing trade with small quantities of
shares with a value from $ 5,000 to $ 10,000. This is sufficient just to learn,
not to make a living. | | To Day-trade,
you require a capital ranging from $ 30,000 to $ 50,000 as a start. | | | You must be
ready to lose 1/3 or more of it, as long as you get on learning during the first
one year or two years of apprenticeship. | | | After this
preliminary statement, one must say that in order to operate in short on
the American market you have to deposit in Security about 30% of the capital
assigned to the operativeness for a minimum capital of $ 25,000. |
|
Taken
all in all, to Day Trade with a less than $ 50,000 capital is inconceivable. |
| | After few
operations you would inevitably meet with some calls and the consequent stop of
the operativeness, if you cannot cover them within 24 hours. | |
| | |
| |
If you
think that in these two years the most successful operations have always
been in short, you can understand that such a technique becomes fundamental. |
| | How much capital
do we have to set aside for each operation (or contract) then? | | Micheal Harris maintains
that the amount of money to be assigned to a system is equal to the product of
its maximum historical drawdown and a number between 1,5 and 2,5. | | |
| The keystone
of the whole system are the stop-losses that soon become stop-profits,
the pyramid purchases and the patterns and pivots’ location. | | If we have
done all well, everything will work: we’ll get some profits and then we’ll have
to decide whether to put them aside or use them to increase the contracts. | | Much will
depend on the capacity and efficiency of the market in which you operate, apart
from the Broker; to understand, sometimes you’ll have to wait even a minute for
the execution of 10.000 shares. And that will seem eternity to you. |
| If you operate
like me in the technological of Nasdaq and you happen
to experiment something similar, you’d better change Broker,
since there are no markets in the world that are more
flexible and efficient than the above-mentioned |
| | | God forbid
that you listen
to that friend of yours that wants to give you the right tip-off.....!
! ! | | |
|
It happened
to me like this ....I received the typical phone call and did what I was told
to do "in a pedestrian way". That day I bought something I did not know. The price
around two dollars was already unusual for my standard range (from $ 25 to $75);
they were energizers, a war in act was taking place behind and, if that was meant
to be a deal, about 10.000 shares were good for the specific purpose. As time
went by, nothing of what had been prognosticated to me occurred. I decided to
sell, but that day noone seemed to be willing to buy... but at a dollar less than
what I had paid for them. I had to wait before selling... The offer lasted about
2 weeks; at small denominations, inferior to 500 shares, I succeeded in getting
rid of them, and, what’s more, sometimes under price. Actually my order had created
some concern at the moment of the purchase, but I didn’t notice that. On the contrary
I was happy to have moved the market, I felt like someone who counts in Wall Street,
by creating a gap up that I was to “pay” later..... Had I remained inside,
I would have lost even more. Still now the event that my friend (obviously in
good faith) had predicted to be bound to happen in few days has not occurred
yet...... |
| | | |
It
was real madness! Anyway He’s not being doing Trading any more...for a long time. |
| | | I
concluded that | | |
|
The
fact of not being in a hurry to earn great amounts of money must surely
allow me to do trading for a long time. |
| | Thus, common
sense will help us in our decisions time by time, together with the required
study and application, as the greatest trader of all, William
Delbert GANN, used
to repeat. |
| | |
"Speculation
or investments are the best deal in the world if you make them be a real business.
But in order to be successful you must be prepared. Do not try to guess or follow
inner information or depend on hopes or fear. If you behave this way, you will
fail. Your success depends on your knowledge of the right rules and the ability
to apply them." |
| | | | Welcome and
Have a Good Trading . | | |
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