Positioning and risk management

Due to the recent tragic events of property and debt investment experience, it is remarkable to inform the public about risk management. Positioning is part of all assets exposed to risks / rewards.

If you take the line or "bet on the farm," there is a very high risk of failure, as it results in great losses as the underlying event moves south. It would be much better to have several different "bets" with "positive statistical expectations" at the same time. As a large number of laws enter, a positive return will ultimately come to fruition. Luck sets its speed.

Quick Example –

The equity capital generates an average 33% profit rate on stock investment strategies. (Some are still profitable after long trades because the average winners are much larger than the limited losses.) This basically means that we can expect 2-4 winners from every 10 barely correlated positions, but these domestic winners are home to the money.

To meet this and reduce the overall risk of loss, many professional traders assume (or risk) 1-5% of the capital per trade / investment unit. The strike of losses happens from time to time, and this system is the only way to survive them before the big winners. If it were different, it would increase the danger to the ruin. The more "try" the statistical probability will be much greater.

Everything has been told and made to invest in a casino where the edge is on your side. Luck determines whether each investment unit is profitable or negative. Examine and win this positive expectation . Carefully plan the position dimensions. The money will follow.

Source by sbobet

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