Controlling and preserving capital and the psychology of money behavior are one of the most important factors in success in investing and trading in financial markets. Many people think that continuous profits can be achieved only by learning technical or fundamental analysis, but experience has shown that without capital management and controlling emotions, even the best strategies will fail. The main goal of every professional investor is to preserve capital in the first place, because until capital is preserved, it will not be possible to make a sustainable profit. Capital management means determining the amount of risk, the volume of entry into transactions, and planning to avoid heavy losses. One of the important principles in this regard is not to risk too much in each transaction; so that it is usually recommended not to risk more than 1 to 3 percent of the total capital in a single transaction. This allows the original capital to be preserved even in the event of several consecutive losses and there is a possibility of compensation in the future. Using a stop loss also plays a key role in preserving capital. A stop loss helps a trader to avoid emotional decisions and avoid getting caught up in big losses. In addition to capital management, the psychology of money is very important, because money is directly related to emotions such as fear, greed, excitement, and hope. Fear can cause premature exits from profitable trades or the inability to close losing trades, and greed usually leads a trader to irrational risks and unplanned entries. On the other hand, trying to get revenge on the market after a loss is one of the most destructive behaviors that often leads to the loss of a large part of the capital. Successful investors consider losses to be a natural part of the market and, instead of focusing on emotional gains, pay attention to the process, discipline, and adherence to their personal rules. Having a clear plan, patience, controlling emotions, and using money that is not urgently needed are among the most important principles of healthy money management. Ultimately, success in the financial markets is the result of logical decisions, proper capital management, and a calm and professional mindset; because in the market, one must first survive and then achieve sustainable profits.
