Thread by @arpit_goel_

I always tell people to start with 1/10 of there total capital in trading/investing and add capital slowly once they get some experience. Let's discuss why?
(1/n)

Let's say you have 1 lakh capital and you deployed your total amount and market fell next day due to some news, now due to less experience you will start selling in panic as you don't know how to tackle such situation.
(2/n)

Now in panic, you can have a drawdown of anywhere between 10-15%. So you will loose 10k-15k, but if you start with 10k only you will lose around 1k-1.5k only and most importantly you will gain experience as you will see markets recover in short span of time. (3/n)

Now as you have started with 10k and you lost 1.5k but your total cap was 1L, so you have still 98.5k in hand and you only have a drawdown of 1.5% which you can easily recover when you have experience. But on a cap of 1L loss would be 15k and now you have to make around 18%
(4/n)

I am not saying to add remaining 90k in one go, Add slowly, start with 10k, than add 10k more and like this after sufficient practice and experience, you can go with full capital.
(n/n)