am i on a right path????

hi all,

am in trading for around 6-7 months backs but have made just losses but after visting this site am trading with few disipline and strategies. please let me know if i am on a wrong path. i do only intraday trade and never take my position at home to avoid heavy losses (despite in exceptional cases where i get perfect news for ne stock). in intraday i trade with small quantity ( like 100-200 shares for 500-100 rs of stock) but for several times. some what around 20-25 trades in a day. my daily volume goes around 25-50lacs. my daily target is to earn 2500to 3000 rs but when i feel that nothing is going in my favour or when i achieve my target i usally stop trading or trade with too low quantity (50-100 shares in very safer way). i dont know whether am right or not but this strategy has turned me in to profit making ( if i count from the day i have started this way). seeking advices from you all. and it wil be very kind of u to help me.

regards
sumit

I was also doing the same (in some manner), but not fortunate like you
I transfered 40% money to the market and more than 10 % to my broker

when you can see light at the end of the tunnel, dont waste time looking for directions..................keep walking!

Sumit, based on what u have wrote, I am expressing my views on your trading. So take it in right spirit.

Doing right -
1) not taking position to home and beign strict daytrader
2) having daily targets

Areas of improvment
1) over trading - If you are not scalper, then 20-25 trades a will feed only yr broker.
2) trading based on news
3) no position size logic (small quantity of 100-200 shares)
4) very low turnover to reward ratio = 2500/ 25L = 0.1%. In my view, trading is not just about executing
5) define daily targets in non-monetary terms
6) Lack of strategy that will help u meet yr target, with lot loss cost of running trading business

Suggested plan of action
1) decide on what type of trading u want to do.. what is your trading timeframe.. what should be the average life of your trade
2) Find a strategy that will give u consistent return, and more importantly it should generate enough signals for you to meet answer of point 1.
3) Define your daily targets in other then profit terms - like #of trades in a day, daily loss limit, what u do if profit target/loss target/#of txn target is achieved.
4) Define position size rules so that u don't take big risk, at the same time, yr position is not small enough to give u return that will meet yr daily target.
5) Narrow your basket of scrips to trade. I know many traders who just trade one stock/ index and make living out of trading.
6) Devot thinking time to make that killer strategy /trading plan that will make other traders envy you..
7) And last but not the least, Take Action and implement your decision.

All the best and happy trading.

Hope that light is not the headlight of engine that is entering the tunnel.

hi,

thanks a lot for the reply. i'll surely take care what u have suggested me. i have a doubt as to what should be th ideal ratio of profit from volume. i.e if i trade 25 lacs of volume in a day, what should be the % for the profit

its not the quantity but quality...
a good trader can easily scalp 20 -25 points on nifty/day...
just make sure you wait for the trades to shape up and dont chase it...
all the best.

Sohan, 2652 method is only of the many appraoches possible for trading.
It is more important for trader to find the approach that fits his personality.
Lets if someone is contrarian traders or price action based trader or indicator based trader then he/she may find it difficult to trade with ratio based approach (some of us are good with pictures/patterns and afraid of numbers).

That doesn't mean 2652 approach is wrong. As u mentioned, it works. but does it suit everybody in this world ? I doubt.

Happy Trading

Sumit, % of profit is no one's control. But yes, as a trader we have to focus on controling our losses. If you really want to make 2.5 L on volumn 25L, you might endup of 2.5L of loss as well.. People have different approach and they make different money.
I can compare myselves to only one person in trading and that is ME.
What other makes should not bother me as my risk appetite, my psychological state of handing loss, my trading is personality is unique to me.
Can I compare apple with orange and find out which one is sweeter.

IMO, your return is result of your trading strategy. The expcted return of strategy, freq of trade generation and amount of Risk per trade will help in finding out how much can u make.

Happy Trading.

Thanks a lot AW10 for the advices. you have cleared several doubts of mine. thx a lot