Monday 24 March 2014

Trading Capital


What is Trading Capital? 




Trading capital is the amount of money a Stock Trader uses for trading. In the era of online trading, the trading capital needed and the cost of trading have gone down significantly.
Many Stock Brokers allow you to deposit very small amounts of money to trade. In any case, you should never deposit more money to your trading account than you would be willing to lose in the worst case.
Proper money management will help you minimize the risk of losing your trading capital and maximize the chances to increase it.

How Much Trading Capital Is Enough?


The simple answer to this question is as much as they can afford. The reason for this is that the amount of trading capital directly affects the markets that they can trade, and most importantly, the amount of risk that their trading has to endure in order to be profitable.

most new traders have a limited amount of trading capital, which they usually find is not even close to the amount of trading capital that they actually need. However, by choosing their markets carefully, by being a very disciplined trader, and most importantly by managing their risk so that it is as low as possible, it is possible for a trader to take a small trading account and turn it into a large trading account.


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