Two methods to ensure no loss of principal

Ronald Ray · March 12, 2023

There are only two ways to keep from losing money: one is to have a small stop-loss space (reflected in the entry position), and the other is to not bet too much at once. For example, if you spend $10,000 to buy one lot, you can make $1,000. If you spend $100,000 to buy ten lots, you can make $10,000. The likelihood is the same, but the more you do, the more you earn, and the less you do, the less you earn. But preventing loss should be the top priority. As we've already talked about, if you buy too many lots this time and get stopped out, you'll suffer a significant loss, which goes against the principle of capital preservation.

After making profits, some traders get more and more greedy and add more positions. Adding positions is a common thing to do. For example, if you bought 10 lots at first and then made money in the expected direction, the trader would blame himself for not buying more at the start. Then, he would start to think that the market would continue to move in the way he thought it would, and he would put most of his money into this product, even though he didn't know how to do things right, like taking profits in small amounts.

When you add more positions, the cost changes. You will go from being profitable to losing money as soon as the market slightly changes. At this point, you panic, lose your ability to think, and your greed slowly turns into hope. You hope that this is only temporary, but the loss keeps getting worse. You might get lucky a few times, but it won't be long before there's a risk of a big loss or liquidation.

It's important to realize that you can't get rich from just one market movement, so don't focus too much on this one time. Greed makes people forget about risk, so they don't always think the market will move in the way they expect it to, ignoring the risk of the opposite trend. This is the key to keeping your money safe.

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broforex51 · March 12, 2023

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Nilde Lucchese · August 1

To protect your principal, use stop-loss orders and diversify your trades. Stop-losses cap potential losses, while diversification spreads risk across different assets. LQDFX offers advanced risk management tools and a range of trading options to help you implement these strategies effectively, ensuring better control over your investment capital.

Zeologic · August 2

Opening too many lot sizes is considered greedy, while greed is the worst enemy of traders that come out from our own selves, we need to make the proper plan based on our risk tolerance in every decision. We can split transactions in different places but should follow the risk tolerance in the risk management plan.

maspluto · August 5

A good trading strategy if we manage it well, then the trading risk will be minimal, that's why we need to learn a lot to understand the strategy and risk management of trading well so that we will get maximum trading results. Especially if trading with adequate capital at Tickmill

Zeologic · August 6

Losses are sometimes inevitable, this is mostly due to volatile market fluctuations, choosing a stable market with strong trending can minimize potential losses, but because future price movements are always a mystery, using a stop loss is one way for traders to manage risk tolerance.

maspluto · August 7

The risk of the way that we must be able to manage well, because where the risk that we can manage well then we will be good also in the course of this forex trading. What is certain is that this forex business trader must always be able to improve where the maximum skill ability so that where we can understand more about where the course of forex trading with Tickmill understands that the benefits are obtained easily and consistently

Hanan Öberg · October 31

To protect your principal, consider using stop-loss orders to limit potential losses on trades. Additionally, diversifying your investments across different asset classes can reduce risk exposure. Combining these methods creates a balanced approach that safeguards your capital while allowing for potential growth in a volatile market environment.

maspluto · November 4

Forex is a big business that has risks, we need to always improve our abilities so that we understand how to trade profitably with the Tickmill broker.

tradesprint · November 4

Abilities can be improved by proper practicing and learning constantly because there is always room for improvement in this business. We have to stay one step ahead in order to make money from this industry.

Zeologic · November 5

The loss remains part of forex trading that is sometimes inevitable, however, to prevent big losses traders need to always control greed, keep trading with the risk management plan, and not trade blindly.

uncle gober · November 7

As a trader who does not fully understand forex trading, it is a good idea to take advantage of the facilities provided by brokers such as demo accounts or education from the Tickmill broker, this really helps traders to learn more about forex trading.