Which basket for the eggs?
October 7, 2009 ás 16:09
Autor: Juck Read by Readers
One of the fundamental rules in financial markets is to diversify our invested capital in many products, having more safety and run less risk. In my opinion, in this trading world , this rule should also apply. But, how to do this?
Selecting different markets with different risk levels associated and using different portions of our capital for each occasion type.
One of the markets in which it is easier to do trading, and perhaps where we almost traders start , is Live Football, which as we all know this, and seem easy enough profit, it is very risky market, since one event and our egg (stake) can go down. So taking this factor into account we can not risk much of our capital in this market at the risk of going bankrupt at a time when we were less favorable. So my position in this market is 5%. So I’ll patiently and running the lowest possible risk, earning some in a more relaxed way and if for some reason something goes wrong my bank will not be much affected.
If the Live Football has an elevated risk, the pre-LIVE trading in football is the exact opposite, a market with good liquidity that has so little volatility, allowing us to have almost total control over our capital invested since we can limit the losses. So this is the safety basket, the basket where i can place more eggs, usually my open positions in this market are approximately 30% of my bankroll.
Other markets used to make trading is the horse racing. This is a market that moves millions and the odds ride at high speed, if we can take advantage of these changes then we will earn good money. It is necessary discipline and study, this combination becomes the perfect market to generate capital and increase our bank, but the risk is a factor to be recorded and taken into account so i use stakes of 10% of my capital and may sometimes reaching up to 15%.
There are more markets markets where trading is done but those I do not use and for that, i can not speak.
All this I just wrote is not in any way scientifically proven, just is what my experience has led me to do, and for me this is a conservative bankroll strategy.