Few years back there used to be a a volatile scrip named Digital Equipments. I used to trade a lot in that. I used to go with my screen reading judgement and the Reward to Risk..It used to be Rs 800 stock if I remember right.
Suppose I based on my judgement feel that the prices are going down, I will short and keep a stop loss of 5 points. The stock used to be very volatile. So I used to enter the stoploss order and keep my finger on the enter button....the moment I see a quote 5 points higher, I will cover the short trade....I used to take 2,3 or even 4 stops at a particular point....but when the trade clicks, the stock used to go 60/80 points in one direction giving a great Reward to Risk for this kind of trade. This works well in volatile counters.
Now I feel very amused when I think of those trades .....but this is actual example of Reward/Risk trades.
Smart_trade
Suppose I based on my judgement feel that the prices are going down, I will short and keep a stop loss of 5 points. The stock used to be very volatile. So I used to enter the stoploss order and keep my finger on the enter button....the moment I see a quote 5 points higher, I will cover the short trade....I used to take 2,3 or even 4 stops at a particular point....but when the trade clicks, the stock used to go 60/80 points in one direction giving a great Reward to Risk for this kind of trade. This works well in volatile counters.
Now I feel very amused when I think of those trades .....but this is actual example of Reward/Risk trades.
Smart_trade
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