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If you’ve got a balance of $20,000 and you enter a trade with $2,000 your core equity is $18,000. If you enter another $2,000 trade, your core equity will be $16,000.
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When you trade without sound management of your capital rules, you might have fact gambling with neglect the. You are not looking at the long term possible on your investment. Rather you tend to be simply looking for that quick high return. Sound money management rules protect your investment, even so will you to make very profitable in your investing possible future.