If a soldier is fighting in a battle, it is important that he keeps himself alive so he can fight for his country. Even if he is injured, he can still fight. But once he is dead, it is the end of the story. Of course it is the soldier’s greatest honor to die for his country.
In trading, if a trader wants to keep trading (like the soldier fighting for his country), he needs to ensure that he has enough capital (to keep himself alive). Even if he loses some money (injured), he can still trade as long as he has capital (his life). However, if he has no more capital (the soldier is dead), then his trading days are over (at least for the moment).
The moral of the story is:
The moral of the story is:
Capital preservation is extremely important in trading.
Often we have seen or heard, that once in a while, some traders (even good ones) like to participate in a suicide-like mission. They play big contracts (over-trading) in one trade hoping to make that BIG money that they are so sure of winning, but end up losing HUGE money that make them lose most of their capital. They end up so demoralised that they have lost their confidence in trading. They are "dying" and almost as good as dead. So are you surviving, winning the battle, badly injured or dying?
If you are "dead", you would not be interested to read this blog anyway. Oh, by the way, you can die for your country, but there is no such thing as dying for the market ;)
If you are "dead", you would not be interested to read this blog anyway. Oh, by the way, you can die for your country, but there is no such thing as dying for the market ;)
- PersianCat (Millionaire-in-progress)
No comments:
Post a Comment