Post
Topic
Board Trading Discussion
Re: The sole difference is capital.
by
South Park
on 25/11/2022, 19:15:52 UTC
Capital measures your possible profit and losses.
Huge capital can be if huge risk as well but that was not the mean thing in trading because the real player is how you manage your fund and the strategies used. Because no matter how huge is your capital if mismanage and never have control of it, losses can be possible in end. So, if you put a huge amount into trading be sure that you already have a backup with knowledge and skill otherwise, you will no longer see your money back in your pocket anymore.
Large capital is more suitable for investment, probably every trader strives to have a large capital that can be invested and receive passive income. A large trading deposit is to some extent a big risk, because you need to be prepared for large amounts. Also, if a trader has good results in trading with small amounts, it does not mean that he will have such results with a much larger deposit.
Some traders may not believe this until they try this by themselves but it is true, it is completely different to trade with a small amount of money than with a big amount of money, and while the techniques necessary are the same, the emotions you will feel while trading will be completely different, when trading a small amount of money is very easy to follow your strategy perfectly, but when you are using a big amount of money a big loss can be enough to make an inexperienced trader to abandon their strategy and lose way more money than what they would have lost otherwise