I.34. Loss management. How to save money on the stock exchange?

Since the loss reduces your account sometimes very rapidly (when using leverage), you should take care of the maximum preservation of your account to ensure further trading. All the following chapters are devoted to how to manage a loss, but here are a number of simple rules that allow you to save your money for a long time:

– use different tools to work with your capital;

– an increase in risk is associated with an increase in loss. The lowest risk of a deposit in a bank within the amount insured by the state (1.4 million rubles).

– do not use shoulders above 3:

– if you have made three trades and they are all unprofitable – change the instrument;

– use a small part of your capital for transactions on the stock exchange, say no more than 20%;

– remember that the average return on Warren Buffett’s deals is 23% per annum;

– choose the correct stop loss value for each instrument;

– do not guess the market, act on the basis of data on the market tests you have performed at the current time.

– carefully observe how the price changes within one daily candle to understand that despite the apparent simplicity, the choice is far from obvious. You can’t do anything about the price, unlike a market maker. However, you can use his footsteps to determine the most likely direction of price movement.

– study and try to deeply understand the laws of the exchange (later in this book).

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