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A Trading Tip: Always Start Low

“Investing, and trading requires millions of dollars to be pumped”—is a common belief among people. This is simply not the case. We live in an age where almost anyone can start trading, and even if you don’t have a lot to invest. However, if you are a newbie, you should learn more about the downfall trends, and some techniques to reduce losses. One tip that a lot of people stick to is a one percent risk rule.

Even if you have a higher trading goal, its always good to stay on the safer side with lower investment. Trading small figures means that you don’t have the same buffer. Simply put, people who are going into investing with a huge amount of money can mitigate against these mistakes, and even swallow some losses to start with but keep trading, or wait for stocks to recover.

Trading with smaller amounts is also quite freeing in some ways, and the risks are arguably less. There are certain strategies you can take up when trading with small amounts in order to try and get ahead.

Moreover, trade using leverages that require about 15% of the value of the trade to be provided in cash. If you were to trade directly with individual stocks and shares you might have to pay 30% of the value in cash upfront. Effectively, you can play in a bigger league than you would be able to if you weren’t using leverage.

You might assume that if you are getting started with less money, then it is a free reign to take risks, and this is true for some investors who want to go with this high-risk (potentially high-reward) strategy. So, its always advisable to keep it low, unless and until you are ready to enter the big game mode.

Risk Warning: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. Trust Capital TC Ltd does not take into account your personal investment objectives or financial situation. Trust Capital TC Ltd makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by an employee of Trust Capital TC Ltd, a third party or otherwise.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.48% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Trust Capital TC does not offer Contracts for Difference to residents of certain jurisdictions including the USA, Iran, and North Korea. Please consider our “Risk Disclosure“.

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