What is deposit overclocking

A considerable number of traders wondered - is it possible to overclock the initial deposit by increasing the initial amount several times and dozens of times? And if so, why not everyone succeeds?

First of all, it should be understood that overclocking is a risky trading method and in many cases leads to the loss of the initial deposit.

Let's try to figure out the details and reasons.

Let's say a trader already has some experience of positive trading with a small deposit and decides to make a breakthrough in trading. Indeed, in theory, everything looks quite simple and mathematical calculations show that the initial amount can increase exponentially in a fairly short time. However, the problem lies in psychology and the violation of all the rules of money management, without which overclocking is not complete.

First of all, a person has a comfort threshold, which consists in the maximum trading lot, when he does not lose the ability to relate to profit and loss without unnecessary emotions. After all, the loss of 10% of a deposit of $ 100 is perceived completely differently than the loss of the same 10% of a deposit of several thousand or tens of thousands of dollars.

In the event of losses, fear and uncertainty arise, which in the future lead to the fact that an adequate perception of the market picture is lost, as a result of which the trader sees not what is in reality, but what he wants to see. This leads to the fact that profitable trades are skipped, and unprofitable ones are taken. In the future, problems grow like a snowball and acceleration ends with a stop-out.

In the event of a rapid growth of the deposit, euphoria and excessive self-confidence arise, the trader gets used to profitable transactions and does not want to put up with a loss. He is already fixated on the fact that the deal must certainly come out in positive territory and either outlasts the loss or is added to the losing position, which in case of initially risky money management also ends with a stop-out.

That is, on the basis of this, we can conclude that the reasons for losing a deposit during acceleration are similar to the general reasons for losses in trading, however, due to an overstated trading lot, its constant increase and the ability to both quickly increase the deposit and lose it, the trader experiences a strong emotional stress.

Does this mean that overclocking is impossible in principle? Possible, but only up to a certain point and not every start will end successfully. Proceeding from this, it should be remembered that since, in order to maximize profit, the entry into the market will be carried out with great risk, it is better to do this with the funds that the trader is ready to lose and break them into ten equal parts. This will largely remove the psychological barrier in the form of fear of losing the deposit in the first transaction, which will significantly increase the chances of success. And it is important to be able to stop in time - as soon as the jitters begin to appear when opening a deal and the fear of losing everything, this means that the trader has reached his current comfort threshold.

As you can see, overclocking a deposit has the right to exist as one of the trading methods, if you approach it with proper precautions, however, each trader must first of all know himself and be able to adequately assess his capabilities and only then decide how he suits him.

Dwain Ross

Financial analyst, writer, news reporter and a certified professional journalist. He was born in Liverpool in 1980. Has a great experience of managing multi-million dollar budgets while giving examination and record uphold inside item advancement divisions. Experience making quarterly gatherings dependent on patterns and anticipated costs.

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