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    Thread: What are the disadvantages of poor Equity?

    1. #1
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      Question What are the disadvantages of poor Equity?

      What are the disadvantages of poor equity?
      and
      what are the hurdles which a trader face when he did not invest wisely?

      I Trade Structures, not Noise.


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      Our Big Floating loses Which always Occurs Because of the trading without Stop loss or The trading by Big lots always Reach us To the Poor Equity which always Has More Disadvantages On us Such as :
      1- Keeping big Part of our Amount In a floating loss and this always make us Don't Find any More Equity to open another Trades .
      2- Poor Equity May make us Under A very Big pressure because it always make us Near From Margin call which always wash out our accounts and this will make Us unable to control on our emotions .
      3- Poor Equity Makes us Unable to open another trades in any other Pairs So we may have Two choices only while having Poor Equity :
      - Leaving our trades until it reach TO margin call or to stop out .
      - Closing All our trades at loss and this always lead us to a very Big loss .
      4- Poor Equity also makes us unable to trade By money management And it always make us lose the Control on the market .

      So when a trader Didn't Invest Wisely He may face Hurdles Such as :
      1- Facing very big loses More times Or losing all the profits that he Collected it .
      2- Losing The Control on the market because the trading with high risk Without any experience .
      3- inability on Covering his previous Big loses Because losing all his money .

      So the trader has to be careful while his trading to make to Trade with Proper Equity make him avoid the High risk and The Big loses while the trading To survive For Long time in the Market .


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      I always write to invest wisely the reason here is is if a trader invest wisely then he can make his living from this business and other money making activities become less prime for trader and he can enjoy the liberty of trading with his adequate trading balance. If one have to test the market then he may invest just one dollar but that is not enough to earn living from this business.

      A trader may not invest all that he wish to invest at once, like if a new trader decide to invest 100$ in this business then he may divide the equity in five parts and start trading with the very first part and there after if he make money then can inject more and in case if he lose he still remain with money and take a new start. In this way he can stay with money even if he fail four times and on case of success he will become able to increase his equity with the more capital.

      Under listed are the few specific benefits that trader can get with adequate trading capital/equity.
      1. Good trading capital offer to use less leverage.
      2. Risk and money management become easy.
      3. Trader can choose a wise strategy for long term trading.
      4. Use of appropriate stop loss become possible for trader.
      5. Trader can enjoy trading of more assets.
      6. Staying with the money become possible.
      7. With adequate trading equity trader can work on multiple plans.

      I Trade Structures, not Noise.


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      Quote Originally Posted by kashifrehman View Post
      What are the disadvantages of poor equity?
      and
      what are the hurdles which a trader face when he did not invest wisely?
      pure equity has so much you disappointing appointing for the traders because if a trader has is so much low balance in his account he will be not able to make big Bro fits and he will not take big risk for his trading sole trading should make their Forex account with a good balance in it which will help them to make big profits and to take to take big risks and two braid for long term


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      To have a very small or a poor amount of equity in the Forex trading business is something that we are ordinarily supposed to avoid so that they can become traders that earn a good amount in profits as regards the Forex trading business. The main disadvantage of a small equity for a trader is that it makes very little profits and thus forces a trader to start taking higher risks in their trades in order to make more profits. This in-turn triggers a higher chance of losses because big risks is never allowed in Forex, It has no advantages and at the same time it is a sure way that a trader can have a margin call in a few days or a few weeks of trading.


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      When you are trading without stop loss and your lot size is quite huge, then you incur a huge floating loss when the market is not moving in your favour, in this case, your equity will far less than your balance. When this scenerio happens, then you are close to having a margin call which is the most painful thing to experience. Here are disadvanatages of poor equity:
      1. When you are trading with a poor equity, it makes you to be under pressure in the sense that you will try to revenge on the market by adding more volume in an attempt to recover the losses you incurred.
      2. When your equity is far lower than your balance, you are closer to a margin call and you wont be able to open more trades to recover your losses.
      3. When you are trading with a poor equity, a large chunk of your capital will be at a floating loss and when you close your trades, you will close at a very huge loss.


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      What are the disadvantages of poor Equity?
      Having a poor equity in our trading account can be very depressing if am to be honest, we should know when in the market, equity can be positive or negative compare to our capital if the equity is getting decreased then we are in an unrealized loss in the market and when its getting increased this means we are in an unrealized profit in the market.
      so when it becomes poor this simply means that we are in a massive unrealise loss.
      1. indecision :honestly this situation used to be confusing, because sometimes we may lack idea of what to do, whether to accept loss or leave the trade open
      2. fear: this used t happen to me, most especially when use high lot size, where am afraid and somehow close my trade oo early in loss


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      If we talk about the amount of profit percentage, there will be traders who have little capital or even just a prize win contest whose growth balance can outperform other traders with those who have large capital. The key to the success of a trader is not the amount of capital he has, but the skill of the trader himself to strategize and use his strategy well.

      However, there are also some benefits that can be obtained by traders who invest large amounts of capital. For example, if it is assumed there are 2 traders who both have approximately the same flight hours with win rates, but one trader with large capital and one trader with a small capital, the following advantages can make traders who have large capital can get high profits.


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      Default Re: What are the disadvantages of poor Equity?

      hello everyone I want to discuss about poor equity Forex trading when you use full time this time leverage then you will face poor equity you have to use used lot size and leverage to manage your account always left leverage 1 ratio 50 to 1 ratio 200 not more than this dear trading members Forex trading is a risky business always used technical fundamental and sentimental analysis do proper work on demo account testify your knowledge and experience according to your experience manager account put proper stop loss and and take profit so that you will get success in Forex trading less loss great profit


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      Default Re: What are the disadvantages of poor Equity?

      If traders are having poor equity ,the main problem he faces is that he fails to make good profit from that and in frustration he may take some high risk which can ultimately wipe off his trading account .but yes if a trader is having patience and can trade with a strong trading strategy its not hard to make a smart amount of profit in a consistent manner ,just one have to wait for the right entry into the market .

      Traders can have some extra pressure while trading with small amounts of equity because they always think that they can be trapped with floating minus and that can kill their margin which can compel them to close the existing open trading account.


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