Hedge Fund Connect

The 4th thing to note: Capital Preservation is more important than making money….

Above is a conversation I had with one of my mentees… He recently funded his account and in less than two weeks in a drive to make money has almost blown his account. He’s gone from $1,000.00 to $3.00!

Most newbies think it is about making money. Little do they realise that if you can learn the secret of capital preservation you will make money in the long run.
Amateurs focus on how much they can make and try to make it as big as possible.
Professional traders focus on how much they can lose and try to make it as small as possible.
To preserve capital, the key is to use stop losses in every trade you take. Never enter a trade without a pre-determined stop loss. Once you are able to limit your downsides, you would have learned the secret of capital preservation and would be trading for the long term.


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