Money Management's 50%:
If you decide to allocate a certain sum of money as a trading portfolio, following the rule of Money Management 50%, half of the portfolio should be liquid in a majority of the time and will be used by some in an emergency against the trend to the market.
The other half devoted to trading is divided by 10 (at least) to form 10 values (stocks, indices, forex, etc.).
So suppose you decide to allocate € 100 000 in trading, only 50 000 € will be permanently active.
then dividing by 10 (at least) this asset, you know at the outset of a trade you can allocate more than 5000 € on a value, representing only 5% of the total weight of the portfolio.
When spotting a basic chart pattern such as the Double Bottom, one knows in advance the theoretical target of FIG.
Therefore to secure some gains, 50% result (at least) the position of the mid-term chart pattern.
In the case of invalidation of a chart pattern, you can let yourself stop under the handle of a cup with handle or below half of the second leg of a double bottom and take its losses and then try reducing the ERP (risqué!) using the 50% secured positions and even some of the 50% of the portfolio to make it liquid.
should be aware that we need a sufficiently high probability graph to try out in an honorable way of a reversal of adverse trends enjoying a technical rebound but for example in case of failure, loss will be even heavier!
Example: suppose we try a double bottom in taking a position at its waterline, after a while you realize that the figure is likely to be invalidated but the rest possibilté that this figure is rather trying to form a shoulder head shoulder and the second shoulder is not yet formed, we take the decision to reduce the PRU's position at the water line of the future Shoulder Head Shoulder (maybe) to exit at the right shoulder, underneath preference.
The Stop should be placed under the water line of the summer (not too close). A further technical
is to allocate a portion of porteffeuille (short or long) on a value that rollover hedging against it from the market, remains to choose the good.
If you are a beginner, start by using only 25% of the trading portfolio and divide the 25 by 20%.
I only wish you good trades!
Persuaders
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