well actually its a simple calculation...if trading cost for shares require a trade size of R10k to get lowest cost to trade relationship..and no trade should represent more than 2% you need a minimum of R500k.. but to start investing you need R10000 as that is the smallest amount you are advise to buy in related to cost...start out investing!
Also if one applies the same principle to trading products were the cost /trade size relationship is R5000 min size..then one needs 250k if trade size is no more than 2%...that said you can always start with less.. but your odds of success reduce with each rand below this min threshold.
no the 2% is trade size, stop loss needs to be +- 20% of the trade size..that way you can be wrong 50 times in a row and still you have only lost 20% of your capital...and if you getting it wrong 50 times in row..you need to get a new stratergy..
disagree .. the 2% is your risk, in other words your stop value .. say you got R100k, 2% at risk is R2,000 .. so if your entry is R10 and the stop level is R9 then you have R1 at risk per stock and hence can buy 2,000 stocks ..
thats makes sense.. except that way you get less than 50 chance to total wipe out, my way you get a whole lot more.. both work, but I would sugest that yours is great when the odds are in your favour and you know what you are doing.
well you get an infinate amount because as you losing your R100k is dropping and hence so is your trade size .. an in theory you'd never get to zero, albeit trade sizes would be way small .. so not infinate, but plenty ..
Suki,it appears you find it hard to believe that 10000 can become 70000.In the Make a million starting towards end 2008, PSG's competion was based on SSF starting with R10000, this morning that account was worth R74000 with a small exposure to GND.Six months ago it was R72000, just shows the easy money was made from april09 to about sep.My CFD account has only grown from R250000 to R279000 the reason is simple, I was happy to 'blow' 10g's but now not happy to lose 70 or 250 so now I'm very cautious before commiting too much capital to a trade.I've decided to transfer 50000 to my long term portfolio and start trading more boldly with 25000 that will be left in my SSF account.Yes 1 can become 7, just as 7 can become zero