Money Management System

The first goal of money management is to ensure survival. You need to avoid
risks that can put you out of business. The second goal is to earn a steady
rate of return, and the third goal is to earn high returns- but survival comes
first."Do not risk thy whole wad" is the first rule of trading.
Then the question is how to manage money while trading?Many market professionals suggests you should take only 3% risk in each trade buy I recommend you should take only 2% risk.But how?
Suppose your trading capital is Rs.10,000 and you see XYZ share is good to buy at Rs.100 by SL 98 with some nice TGT then how much share you should buy at 2% risk?
2% of Rs.10,000 is 200 and your Stop loss is 2 rs. then 200/2=100 shares you can buy. If Sl hit you lost only 2% of your capital.by this way you should trade 3-4 stocks only. new entry can b made wen TGT achived or Sl hit among that 3-4 stocks. In next blog I will tell you how to trade my calls for making good profit.Happy trading