You MUST routinely withdraw some of your profits to reduce risk?
- Thread starter crgarcia
- Start date
Yeah... if keeping money in your account is a RISK, then you shouldn't be trading.
But, I do understand where the study might be coming from. If you plan to trade one contract with a $10K account, why keep all $10K in the account when the margin for 1 contract is much less. You are exposing yourself to unwanted risks of the brokerage firm going broke overnight etc.
The more you leverage/bet, the more risk there is. But that seems to have little to do with "withdrawing profits"
Your biggest risks seem to be: not having a tradable edge, keeping all your money with one broker, not protecting your equity against international catastrophic events, and not using proper money management
crgarcia
Some years ago, I found an Internet article (couldn't find it now) that stated that you must routinely withdraw some of your profits to reduce risk, specially true if you are highly leveraged.
That article appeared to be backed by some statistical evidence.
Some opinions on this?
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Yes ,it is correct ,alsov if you are not leveraged .
Exist multiple aspects , not only statistic,game theory ,but
philosophie alsov -objective and means
Some years ago, I found an Internet article (couldn't find it now) that stated that you must routinely withdraw some of your profits to reduce risk, specially true if you are highly leveraged.
That article appeared to be backed by some statistical evidence.
Some opinions on this?
''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''
Yes ,it is correct ,alsov if you are not leveraged .
Exist multiple aspects , not only statistic,game theory ,but
philosophie alsov -objective and means
My strategy is to distribute half of my account balance everytime my equity reaches a certain level. I trade futures, so when the equity reaches a balance that comes close to the maximum number of futures contracts I can easily move to continue trading without excessive slippage, I simply withdraw half of my balance. This eliminates the need for further equity management, and accomplishes the equally important goal of reducing risk to my account.