| The Capital
necessary for trading |
| |
| |
| In order to
do trading, money is required, but to a
smaller extent than many may think. |
| What we can
achieve, above all, are results that allow
us to make a fortune in a relatively short
amount of time (See
William Delbert GANN’s bibliography) |
| Anyway, please
remember that one can also ruin oneself
by a bad management of one’s money....and,
mind, even knowing analysis and anything
related. |
| To avoid that,
the following is needed: |
- Fix how
much capital you can assign to the market,
and forget about it.
- Build a
system that allows the capital to accrue.
- Manage money
appropriately so as to check the
volumes
|
| To learn my
method, you can operate in day trade or
in swing trade with small quantities of
shares with a value from $ 5,000 to $ 10,000.
This is sufficient just to learn, not to
make a living. |
| To Day-trade,
you require a capital ranging from $ 30,000
to $ 50,000 as a start. |
|
| You must be
ready to lose 1/3 or more of it, as long
as you get on learning during the first
one year or two years of apprenticeship. |
|
| After this
preliminary statement, one must say that
in order to operate in short on the
American market you have to deposit in Security
about 30% of the capital assigned to the
operativeness for a minimum capital of $
25,000. |
|
Taken
all in all, to Day Trade with
a less than $ 50,000 capital is
inconceivable.
|
|
| After few
operations you would inevitably meet with
some calls and the consequent stop of the
operativeness, if you cannot cover
them within 24 hours. |
|
If you
think that in these two years
the most successful operations
have always been in short,
you can understand that such a
technique becomes fundamental.
|
|
| How much capital
do we have to set aside for each operation
(or contract) then? |
| Micheal Harris maintains
that the amount of money to be assigned
to a system is equal to the product of its
maximum historical drawdown and a number
between 1,5 and 2,5. |
|
|
