Am I Right? About Averaging Losses..

Hai friends, i have a small doubt give your suggesstion. Please........

For Example:-
I have 10000Rs. and I Can use my intraday limt upto 4 times of my capital...Say, I can buy the shares for 40000Rs in intraday.

Unitech is 100RS. So I buy 100 Shares @ 100Rs.

Usually i expect 0.50% Profit only.

Now market goes against me. But I wait without puttting Stop Loss Order.
Then, Unitech Reaches the day low of 95Rs... So I use another 30000RS intraday limit given by sharekhan. So i buy 300 Shares @ 95Rs.

Now My Average Purchase Value is 95.75Rs.. Atlast Market closes @ 96.75Rs. So I Sell 400 Shares @ 96.75Rs with a profit of 400Rs.

Suppose The Price remains @ 95.75Rs or below 95.75Rs, I Will sell next day by using

BTST Method for Nifty Stocks given by sharekhan.


Am i going in a correct way?
This type of averaging losses is correct?

But If i trade 10 times, Abnormal losses may incur 1 or 2 times.




What do you think about such averaging losses?

Please help me.and give your suggesstions.......

Vinothbabu.S

9 times out of 10 averaging a losing position results in more losses. You buy a stock with the opinion that it is going to go up. When it does not go up cut the losses accept that your opinion was wrong and move on. Trade what you see on the screen not what you think.

Hello,

Don't average in such way suppose if you used BTST but on second day if the share open at 90 then what you will do ????? average...

Instead of that make proper plan keep stop loss of in such way that you will loss maximum 2% of your capital. First of I will suggest you do proper analysis, make proper trading plan and judge your technical analysis by paper trading...Build your confidence and then trade to make money.

Happy Trading...

Thank you for your valuable suggesstions.........

You can average/pyramid on the winning trade though....

Quite rewarding.

My approach to averaging is slightly different.

I will average my positions as long as my entry setup is intact, and overall position is within my MM.

Suppose, my entry is @ 100/- and stoploss is @ 95. I will average my positions between 95 - 100 with a strict stoploss @ 95 for overall position.

Hello Friends,

Inshort you must have some trading plan and strict stoploss.

Happy Trading....

If We Use 1/10th of our Capital to buy the shares, We can average it easily.

For Example, I have 10000Rs. I buy 10 unitech shares @ 100Rs. If unitech goes down @95Rs at 3.30Pm, I can place an order to buy 90shares @95Rs by using remaining 9/10th of capital at 3.50Pm to 4.00PM in NSE.

Now the Average Purchase cost per share is 95.50Rs only. I can definetely sell this shares @ 97.50 Rs on next day morning( By using BTST). Or I can hold it, Because i used my own money not sharkhan's intraday limit.

This Strategy Works Well. I am Making Profit. In Some Abnormal Conditions, 1 or 2 times per month, i am holding it upto 3 or 4 days.


But We need more initial investment to do always profitable.

If we have 1 lakh, we should just buy the shares for 10000Rs only. not more than 10000Rs.


How is my successful strategy?

Give any comments or Suggestions.

Vinothbabu.

you are tarding at NSE of India at those times.

great. :rofl:rofl::rofl:

on second thoughts...... is it NSE India or some other country???

Market is always not stable. We cannot predetermine the market. But our Money management towards the market trend will always protect us from losses.

According to me, Share Market is a money-Money game. We can win this with number-number game.

I am winning......................

Always money management rocks.............

Simple thought.Suppose, Just Imagine that your broker says that you can use your 1/10th of cash only to buy the share and SEBI also permits such conditions. All Brokers are permitting such conditions.

Now what will you do? How will you trade? defenitely you will obey the conditions given by your share broker. then only you can trade on shares.

I am imagining myself that i can use my 1/10th amount only to buy shares. So i am escaping from losses by using my 9/10th amount when prices go down.

So I win..........and am always happy with trading...........

Vinothbabu.