Introduction

Margin trading has gained popularity recently, as it provides several benefits to traders due to the compounding effect on the investment returns. However, many investors are remaining cautious in margin trading, as high margin debt can be incurred if it is not used wisely. Hence, risks management is an important skill to help investors to reap the benefits from margin trading. 

To read the previous relevant post, please visit MQ Trader - Risk of Margin Account.

Risk Management

Looking for Short-term Opportunistic Trading

Long-term or buy-and-hold strategy is not recommended for margin trading, as the accumulated interest charges can be significantly high over the time resulting in relatively lower profits to be earned. “Fast in fast out” strategy should be used in highly potential bullish stocks instead to maximize the profits with negligible interest charges.

Avoid using the maximum leverage

It is not necessary for investors to use the maximum available leverage for investment, as stock market does not go how according to our anticipation all the time. Some breathing room should be provided so as to protect our capital.

Diversification of portfolio

We should not “put all the eggs into a single basket” to avoid the serious impact contributed by a drastic fall of the share price of a single share.  Putting a large margined position in a single stock is dangerous, as any number of events is possible to plunge the share price instantly.

Close Portfolio Monitoring

Investors have to pay high attention to the news that may bring negative effect to the share price, so as to cut loss before the share price plunge to the extremely low price.

Monitoring Our Position with MQ Trader Stock Analysis System

MQ fundamental analysis and MQ technical analysis with rating system which is the key feature of MQ Trader System enables us to identify the bullish stocks with good fundamentals instantly. This feature can help investors to grab good opportunities for earning profits by using margin facility. To know more about MQ fundamental analysis and MQ technical analysis, please read MQ Trader - Fundamental Analysis [TOPGLOV] and MQ Trader - Technical Analysis [UNISEM].

MQ Trader system provides several trading strategies such as EMA 5 Crossover, ADX Crossover, MACD and RSI, Guppy MMA and OBV which are able to detect buy and sell signals based on quantitative data. These trading signals are not influenced by human’s bias and emotion resulting in more accurate interpretation of market sentiments and momentum. You can refer to MQ Trader – Portfolio Protection Strategy (Part 1) to know how we can protect our capital in bearish market by using MQ trading strategies.

Conclusion

Investment always involves certain extent of risk but it can generate profit with compounding effect if we know how to manage our risk. MQ Trader system can help to minimize the risk, as it can analyse the technical charts much quicker than a human could. Thus, it can help us to enter and exit from our position before the share price rise and drop respectively.

Community Feedback

We encourage traders to try out and evaluate the MQ Trader system and provide us feedback on the features you like to see in the system. We have received many positive feedbacks so far, and we are currently compiling and reviewing them for possible inclusion into the next release of the system.

We would like to develop this system based on community feedback to cater for community needs. Thanks to all those who have provided valuable feedback to us. Keep those feedbacks coming in!

Disclaimer

This article does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties in the Internet. We may or may not hold position in the stock covered, or initiate new position in the stock within the next 7 days.

Join us now!

MQ Trader stock analysis system uses Artificial Intelligence (AI), various technical indicators and quantitative data to generate accurate trading signals without the interference of human's emotions and bias against any particular stock. It comprises trading strategies which are very popular among fund managers for analysing stocks. 

MQ Trader stock analysis system is SPONSORED for MQ Trader members. To use this amazing tool, you can sign up via MQ Trader Sign Up!

Contact us

Please do not hesitate to contact us if you have any enquiry: