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Sue,
At, Date: Tue, 08 Jan 2002 19:57:21 +1100 you wrote:
From: sue crew <screwy@xxxxxxxxxxxxxx>
Subject: Re: risk capital to start trading
To trade on your own ( real traders), how much risk capital is prudent?
How
little can you start with?
cheers
With an on-line internet dealer you can start with less than $200 and
with trading starting at a penny a point is a lot safer than say $500 or
$50 a point!
If you stuck to a single position and purchased the S & P 500 at 1160
at a stake of 1 penny a point you would lose less than $20 if the S &
P 500 fell to zero.
But of course, if you trade more you can lose more. But
most traders, early in the game, (and often late in the game) overtrade
their account and skill level.
Sometimes a higher skill level in making money, leads, though greed and
or ignorance, to overtrading in more subtle ways. Your
broker/clearing house/dealer... does not care how subtle you are - if you
overtrade you will eventually encounter a combination of overtrading and
a market behaviour that leads to your positions being closed and losing
all or more of your money.
Under-trade and under-trade some more. If you do not
know how to work out how much you can afford to trade (acceptable risk of
ruin calculations is a method that can work for each traders system
and personality) then do not trade.
Regards, Ric.
www.traderscalm.com
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