Tag Archives: loans

Adding Equal Positions

As larger commitments are added, an inverted pyramid is created in which the risk of an immediate loss due to a small reversal becomes greater. Adding equal numbers of contracts reduces the proportion of the original commitment in the event … Continue reading

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COMPOUNDING A POSITION

At some point, all speculators find themselves adding to, or compounding, their position. Many traders view this as a means of concentrating on those commodities that have more potential. There are two lines of thinking among these traders. When a … Continue reading

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