What is Capital management and how it differs from risk management? if you do not know the answer, stop trading!
Hi,
Why don’t you put us out of our misery and spill the beans?
Capital management is a part of risk management.
It’s not X. When you pose a question that you know the answer to, please provide the answer as well.
Capital management is insuring that you have enough money to be able to trade (in line with your strategy), whereas risk management is ensuring you are not going to go broke while you are trading.
Hmmm, OK, then what is it?
Why not just share what it is instead of telling people to stop trading? Would be more helpful!
talking about u personally, it is very beyond my power!
thats what I planned for, this is a brain storm now
Brainstorm? To what end?
I think sharing the answer would be more helpful than brainstorming like this
Thank you for your response. There is much misinformation and disinformation on the social networks. I doubt there is any value for any member from your question but the responses from many members confirms your post presents little value to members other than to confirm that it is wasteful of members’ time. Please do not discourage people from trading on a forum dedicated to knowledge about trading. It is confusing and not helpful at all.
Capital management involves the allocation and preservation of trading capital to ensure long-term sustainability and growth. It focuses on how much of your total capital you allocate to each trade, diversifying investments, and setting profit targets. Risk management, on the other hand, involves strategies to minimize potential losses on individual trades, such as setting stop-loss orders, using proper position sizing, and controlling leverage. While capital management ensures you have enough resources to keep trading, risk management aims to protect you from significant losses in each trade.
A more useful post than Vasil’s.
You are totally right about this. Brain storm i did for not making it very simple and fast. when you learn with no thinking you forget fast.
I love your answer and thank you for actually answering. other people as you see usually only try to be MR.IAMCOOL! but I finally see someone answering.
Finally the answer, I use very simple and general answer because the full answer is very long. risk management is about the trades that you have in one time, the open trades that you should manage. capital management is about your full balance and how it goes up and down. so when we say I have a r/r 2 it means your current potensial loss is 2 times than your win (in a single time you have potential to double the amount) but in capital management you cannot have expect of making your balance 2X. I thought this is very useful for members to learn because i see in different posts that people mistake these two and this is big problem.
Hmmm right. You remind me of my high school teachers haha
LOL i d have some teaching experience actually