To protect yourself from fatal Error, the trader must have to create for himself a reserve fund and increase it at the expense of profits derived from trade. Now, let’s go back to the question: ‘what approach (aggressive or cautious) better used in trade? “. And look at it in terms of considering only the problems. For this we consider two examples: 1. In the first example, as we have said, trader acts aggressively. Using your strategy, it may, within 3 weeks to increase the initial deposit is trading at 3 times. But according to statistics on the 4 th week, the likelihood is high that he will make a fatal mistake, which (we assume) can lead to loss of entire deposit.
2. The second example is very disciplined trader and operates on the market with great caution. As a result, he gets a small profit (assuming a total of 20% per month), but the likelihood that it may lose trade funds practically zero. So which approach is best to use? From a security standpoint is the same second. But when for the second example, we say that the probability of losing money trading is virtually zero, we can to do so, if his statement will be based only on the statistics issued by the strategy, while completely eliminating the human factor.
But, the problem lies in the fact that everyone working in the market trader is a man, and man, as we know, can not be completely immune from mistakes. Therefore, concluding from the above, once again, saying: that even the most disciplined and cautious trader is not insured from a fatal error. In this connection, we return to our 2-m examples and remember that the only solution to this problem is to create a reserve fund trader. Given this, and now must again ask the old question: ‘So what approach to generate revenues we choose? “. In the first case the trader increases by 3 times, before there is a threat that he will make a fatal mistake. We can every 3 weeks to remove all the profits and form of its reserve fund. If there is irreparable, the magnitude of the contingency fund would still be more than 1,5 times the initial sales of the deposit, and we are left with 50 per cent profit. In the second case, as it turned out, we still do not immune to fatal errors. But to profit from trading just 20% per month, how much time we need to create the equivalent in magnitude reserve fund? I think something else to add here is inappropriate. This article, I wanted to show that, working in the market trader must not only think about the possible profits. First of all he has to think about long term of their work. Therefore, bearing in her arms and using the work profitable strategy, you must know thoroughly all of its strengths and weaknesses and be ready to rise to unforeseen and, moreover, an irreversible situation in the market. How I wish you success!