Nathaniel J Jones

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What is capital preservation in trading?

Capital preservation means prioritizing the protection of trading capital over maximizing profits. The idea is that without capital, no future opportunities can be pursued. Traders achieve preservation by controlling risk per trade, using stop-losses, and avoiding overleveraging. For beginners, the goal should be to “stay in the game” long enough to gain experience. Professional traders often emphasize capital preservation as a first principle, viewing profit as secondary to survival. This conservative approach ensures sustainability in volatile markets.