Trading must have capital, run out of capital

Capital is like a close friend of a trader. Being a trader is to have the capital to trade, all capital is considered a trade break. So capital is the thing that needs to be protected the most in a trader's life.


So why throw all your capital into a trade?

Doing it is like throwing money into a fire and letting your life be determined by chance. Trading in this way involves the risk of losing all your capital, and running out of capital means being out of the market, with no other opportunities. Actually, if traders have the mindset of throwing all their capital into a trade, they deserve to be eliminated from the game as soon as possible, because they themselves do not want to give them a second chance.

The legendary Jesse Livermore also had a bankruptcy and run out of capital, and he had to borrow capital from many friends around to start over. Because he knew that if he couldn't trade, he wouldn't know how to get his lost fortune back. But to trade, there must be capital. The vicious circle.


In the short term, every trade has a 50% probability.

This is accurate and is the most basic rule of statistical probability. When entering any trade, only 1 of 2 results is won or lose, so the probability is only 50%, equal to the probability of a coin toss. Do you want all your wealth to be determined by the toss of a coin?


Do not say that you will definitely win. Nothing is certain. Although all the factors on the price chart say that the sibling wins, if only one factor deviates from that result, the probability of losing is still 50%, and nothing can change. there. There are billions of variables that affect the outcome of a trade, but its probability remains forever at 50%.

Legendary traders who make big money by trading are small

And no legendary trader has made a fortune by entering a full account order. History has shown that.


Legendary traders understand that protecting capital and being in the market is their first and foremost goal, so they will enter small orders and capitalize on the power of compounding over the long term.