Are you managing your capital effectively?

Which capital management strategy is the best? When you’re enjoying success in trading it’s easy to get carried away. A solid money management strategy may help secure your capital and decrease risk.

3 main approaches to managing capital #1:Total profit withdrawal A trader preserves the same trading balance as initially deposited, merely skimming and withdrawing the profit made with it.

The trader makes small but steady profit. Difficult to grow the capital significantly.

#2:Total reinvestment A trader reinvests all of the profit along with the funds initially deposited, thus increasing the turnover volume.

The capital has the potential to grow exponentially. Rather reckless in terms of risks.

#3:Partial reinvestment A trader reinvests a fixed percentage of profit, along with the amount initially invested.

The capital can grow steadily and with controlled risk Not ideal for those looking to quickly double their investment.

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As you can see, a balanced approach to managing profit is more likely to preserve and grow your capital. The final decision, however, is up to you.

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