Diversification as well as trading portfolios are very important elements of stable

Guys, with the help of signal providers from Zulutrade and their performance for the previous month, let’s talk about the DIVERSIFICATION!

You have to understand that when we talk about trading in the financial market, first of all with have to think about the potential risk and drawdowns. Trading is risky, and every time when you open a trade, the price can move against you. Trades closed by stop orders as well as drawdowns are the parts of any profitable trading. Novice traders don’t understand this simple fact, and they expect to make money all the time. Of course, it is the wrong approach!

What is diversification?

In simple words, it is the method that allows traders to cut down the risk. You can cut your whole risk into pieces using the different financial assets, markets, trading strategies, trading styles, tools. Doing this, you have the opportunity to avoid deep drawdowns, and you have many more opportunities to manage your capital safely and properly. As a result, you can avoid the high volatility of your equity curve, and it is one of the main goals of profitable trading in the long run.

Please, look at the image above. I picked the TOP 5 traders who have been managing more than 2 500 000$ capital from thousands of investors. You can see their equity curves and how they have been moving in this period. If you combine these 5 TOP signal providers in a trading portfolio, we will get the following:
– when one trader is in a drawdown, another trader can be in profit
– it makes your equity curve smoother
– in the exact period, you get profit from all traders.

Diversification as well as trading portfolios, are very important elements of stable and profitable trading in the long run. These principles shouldn’t be ignored, and they can be used by a wide range of traders and investors.For more details and if you want to copy trading signals from TOP traders,

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