Home > Money Management > MONEY MANAGEMENT TIP #6: REACH FOR YOUR WALLET!

MONEY MANAGEMENT TIP #6: REACH FOR YOUR WALLET!

November 7th, 2011

REACH FOR YOUR WALLET: Don’t play with a short stack of chips. When necessary, reach into the cash reserves of your trading funds account and replenish your chips to a comfortable level. That way, you will relieve the pressure caused by playing with scared money.

Like the $5 player at a Las Vegas Craps table who is on an extended losing streak, it is really hard to play smart when you only have a few chips left in your tray. What often happens when players get low on short-term trading funds is that they impatiently go “all-in” with one giant bet on a single stock. This unwise impulse to boldly go “all-in” has an uncanny way of resulting in a total loss of capital.

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Note: This also means that if your chips get down to super low levels, it would be wise to cash out, move to the sidelines, and regroup. That’s because playing the stock market with scared money almost always leads to disastrous results.

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