Dear Experts,
I am a newbie here who has started paper trading and reading tons of articles to get into the world of trading. I have a small confusion on the following math regarding calculation of NUMBER OF SHARES TO BUY on a BUYING scenario. Please do clarify it clearly.
FOLLOWING ARE ALL ASSUMPTIONS PLEASE.
Trading Account : Rs 1,00,000/-
Amount willing to risk per trade : 2% of 1,00,000 which is Rs 2000/trade
Eg: TITAN EQUITY ( Current Market Price) : Rs 318/Share
My Logical calculated Stop Loss referring chart (Technically) : Rs 315
Difference in Stop Loss per share willing to Risk : Rs 3
Formula to calculate number of shares to be bought : Risking amount of Total trading account / Amount to be lost per share
So here it would be 2000/3 ( I hope so the formula is right) : 666 Shares can be purchased
But my total account value is Rs 1,00,000. For buying 666 shares I need 318 x 666 = Rs 2,11,788/- ( I am not considering leverage factor here. Just keeping it simple)
But I know that with Rs 1,00,000 I can ONLY buy 1,00,000/318 Shares = 314 Shares.
So where is the mistake over here and how do we actually calculate the proper number of shares/size to BUY/SELL within the trading capital. I am confused here totally.
My risk is 2% per trade
Keeping the SL 3/trade , how do we come to this point to calculate the position size.
Requesting you to derive a formula to get the position size.
Not interested in some calculators. But actual math needed Gurus considering the above scenario
Thanks for viewing though and kindly help me out and help other newbies out as well
Guide me EXPERTS
I am a newbie here who has started paper trading and reading tons of articles to get into the world of trading. I have a small confusion on the following math regarding calculation of NUMBER OF SHARES TO BUY on a BUYING scenario. Please do clarify it clearly.
FOLLOWING ARE ALL ASSUMPTIONS PLEASE.
Trading Account : Rs 1,00,000/-
Amount willing to risk per trade : 2% of 1,00,000 which is Rs 2000/trade
Eg: TITAN EQUITY ( Current Market Price) : Rs 318/Share
My Logical calculated Stop Loss referring chart (Technically) : Rs 315
Difference in Stop Loss per share willing to Risk : Rs 3
Formula to calculate number of shares to be bought : Risking amount of Total trading account / Amount to be lost per share
So here it would be 2000/3 ( I hope so the formula is right) : 666 Shares can be purchased
But my total account value is Rs 1,00,000. For buying 666 shares I need 318 x 666 = Rs 2,11,788/- ( I am not considering leverage factor here. Just keeping it simple)
But I know that with Rs 1,00,000 I can ONLY buy 1,00,000/318 Shares = 314 Shares.
So where is the mistake over here and how do we actually calculate the proper number of shares/size to BUY/SELL within the trading capital. I am confused here totally.
My risk is 2% per trade
Keeping the SL 3/trade , how do we come to this point to calculate the position size.
Requesting you to derive a formula to get the position size.
Not interested in some calculators. But actual math needed Gurus considering the above scenario
Thanks for viewing though and kindly help me out and help other newbies out as well
Guide me EXPERTS