InvestorQ : As a trader, how much cash can I sit on at any point of time?
priya Shah made post

As a trader, how much cash can I sit on at any point of time?

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Anushri Vasa answered.
3 years ago
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As a trader, you job is to identify opportunities and trade. Sitting on cash is not an activity but it is the absence of activity. When should a trader ideally sit on cash? Obviously there are no easy answers to this question. In times of very high volatility it does not make sense to trade aggressively and you may choose to sit on cash. But one of the underlying rules of trading is that the more you sit on cash the less money you make in trading. That is because trading is essentially a game of rotating your money and playing the market both ways. By sitting on cash you are losing out on the basic premise of trading. As a trader, your job is not to idle your money. Holding cash has a huge cost to it and there is no way you are going to hold on to cash for too long.

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