Thursday, 2 January 2014

Money management (No nonsense Mathematics):

Capital: 3.5 Lac
Risk per trade:  1% i.e. 3500 INR (Reduced from 1.5 to 1%)

Calculate net profit / loss at end of every month and if in profit add 50% of profit amount to risk to take per trade.

E.g. Say I make 20000 INR in a month. Then I will add 50% of this amount i.e. 10k to Risk/Trade. So risk per trade would be 13500.
That’s the strategy to scale.
Currently I am undercapitalized. Hence would not want to request a Pay-out at end of every month. Banking the money is very important. Even the greatest like Jesse made a mistake of not taking the money home. I should not make this mistake. 10 lac is the amount I am looking forward to. Once that figure is achieved then would plan a strategy to take home / invest the profit is other asset class(Less risk asset class that is)

Also there would a hard stop in place. Meaning If have X number of loss making trades in a month then I will not trade for rest of the month. Just to protect one bad month from wiping me out.
There are no targets that I will like to set for myself. I will take whatever markets have to offer. I am quite sure that if I get it right I will have satisfactory amount.

No comments:

Post a Comment