Trading stocks and shares has become really popular over the years and today, you will find a good amount of information about trading strategies on the internet. In order to gain results from online trading, investors mostly look for trading strategies and tips that can help them maximize their wins. Today, traders use most of their time searching for strategies, best trading signals and the best markets to invest in. It is a fact that these things are essential for success, but there is another thing that is as important as strategies and signals and that is the investment management.
People get into online trading to achieve high results on their investments and when trades are executed, it either results in a win or a loss. So when the goal is to maximize your results, why not utilize investment management strategies? There are various strategies that you can explore and employ to get better trading results and to achieve your financial goals.
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Investment Management & Risk Control in Trading
Investment management and risk are closely related, but they are not the same. As a trader, you must decide how much investment you want to put at risk when it comes to executing a trade. If you want to invest higher amounts, then there will be a bigger risk associated with the trading. You can minimize your risk by managing your finances. Avoid placing a bigger amount of investment on a single trade. This is because if the trade is not successful, you will risk getting your entire account wiped out. The best thing to do is to take small risks by investing small amounts.
Investment Management Strategies
In order to succeed in the financial world, you must have a good investment management strategy in place. There are a number of strategies available for traders to benefit from. If you choose this method for investment management, then you will be able to minimize your risks. The method involves achieving more results from a trade that carries a lower degree of risk. If your risks are minimized, you will have better chances of success.
How to Implement the Kelly System?
If you are looking to use the Kelly system, then you must have a control over how much investment you are investing on your trades. For each trade you execute, you must only invest about 5% of your account balance. What this basically means is that if you risk 5% of your investment, you will have a chance of getting about 3.5% returns on your investment. For many traders, a 5% investment on a trade may seem very small. But they don’t realize that the idea is to minimize the risks so you get more results.
When you invest 5%, you will have balance in your account. You will never risk losing all of your investment on a single trade. And even if you lose a trade, you will have the opportunity to execute many more trades. You must have a proper investment management strategy in place so you can achieve more results in the long term.