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Strategies & Market Trends : Technical Analysis - Beginners

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To: Christopher who wrote (10402)6/2/1999 12:21:00 AM
From: Christopher   of 12039
 
Here is the deal with money management.

Judy, may be I was wrong in telling you not to trade a stock if your loss would be 5%. Here is what I do. I calculate my total loss if all my stops are hit. I try to keep my loss to 15% or less. here is the reason I keep it to 15% or less. If your loss is 15% then you need to make about 16.5% to get back the capital you started with. If your loss is 20% then you need to make about 25% profit to get back to your capital. If your loss is 50% then you need a 100% profit to get back your capital.

Here is an example. If you start with 10k and lose 50% then you will be left with 5K. Now you need to make 100% to get back your original capital of 10k.

Good trading,

Christopher
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