how to invest without losing in share market

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  #1  
Old 5th September 2004, 01:29 AM
hmp hmp is offline
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Smile how to invest without losing in share market

hi
i m in share market for last four years. i have observed that some traders
trade successfully by keeping double stoploss. they buy and sale the share at once and then cutting losing position in short they get proffit by holding the remaining position. can anybody or i request traderji to throw some light on this type of trading. because this is the shurest way of trading proffitably if one plays with caution.
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Old 5th September 2004, 08:13 AM
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Default Re: how to invest without losing in share market

Quote:
Originally Posted by hmp
hi
i m in share market for last four years. i have observed that some traders
trade successfully by keeping double stoploss. they buy and sale the share at once and then cutting losing position in short they get proffit by holding the remaining position. can anybody or i request traderji to throw some light on this type of trading. because this is the shurest way of trading proffitably if one plays with caution.
This is called a STOP and REVERSE TRADING STRATEGY

The defination of stop and reverse:
A stop which when hit is a signal to close the current position and open a new position in the opposite position.
Example: A trader holding a long position would sell that position and then go short on the same security.


You can try experimenting with a technical indicator called Parabolic Stop & Release (SAR) for this trading strategy.

Parabolic Stop and Release was introduced by J Welles Wilder. The Parabolic SAR is a trend following indicator that is designed to create a trailing stop. This is a point that follows a prevailing trend, giving a possible value for a stop loss order that is far enough away from the original trend to avoid being stopped out with a small consolidation and retraction moves.

The trailing stop moves with the trend, accelerating closer to price action as time passes giving the path of the indicator a parabolic look. When price penetrates the SAR a new calculation is started taking the other side of the market with an initial setting that again allows a certain amount of initial volatility if the trend is slow to get underway.

The SAR can be used to set stop orders later in the trend or as a conformational tool in confirming the trend. Some traders may consider the SAR for both entry and exit signals but some caution should be applied to this approach as whipsaw losses can mount during a time period of multiple short trend reversals over a short time period.

The shape, slope and speed of the SAR, are controlled by three parameters. The starting acceleration factor (AF), the increment that the AF can change when a new price high or low is made and the maximum AF. Choices for these should reflect the price characteristics of the base security being analyzed and the strategy, and personal preferences of the trader using the indicator.

Maybe some of you would like to volunteer by posting some charts with examples of this indicator.
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  #3  
Old 10th July 2005, 11:07 PM
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Default Re: how to invest without losing in share market

Dear Traderji:

Just a minor correction - but SAR stands for Stop and Reverse.

Nautilus
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