How to exit a successful trade!

[Saint]

the same applies to you Sir. we look forward to more contribution from you.

quite a few time constraints,my friend,but shall try as much as is humanly possible.

Saint

 

[uasish]

Traderji,
There is a growing Fad ,not to put Stop Loss,many newbie is caught in this.There was even a post to revise SL upwardly in a Short trade.People of your experience level ,if can start a Thread on this say "How to Exit a Unsuccessful Trade",would be great beneficial.
This Forum is normally a choice one for newbies ,apart from that how many of us actually follow the Stop Loss Rule.
Asish

 

[ratan jain]

Ashish:

Dangerous fad, really.

And when we point out pitfalls of not keeping SL, these guys go on and on about hedging!

Funny

Lets see if these guys last the next 4 weeks

Remember Hitesh?

Your advice to Saint is really good

Saint, personal request that PLEASE tell newbies to keep SL.

 

[Saint]

Hi Ratan,Asish,

An old-ish post from Traderji,.........

The key components of a successful trading plan are an edge, discipline, risk control, and money management.

Controlling your risk

Successful speculation is all about managing risk. A winning trader always knows how much they will lose, but rarely know how much they will make. The key is to never let a single trade or single event (that may impact on multiple positions) have a major negative impact on the trading account.

"Never, ever, trade without a stop-loss order. If you don't know what a stop-loss is, you should not be trading."

Money management

A basic investment tenet states there is a direct relationship between risk and return. Trading is no different - the greater the account value risked on a single trade idea, the more volatile the total returns from the trading strategy will be.

A simple strategy is to never risk more than 2% of your trading account on a trade. Most professional money managers will risk a fraction of 1% on a single trade.

"There are many bold traders, but there are very few old, bold traders".

The Difference between the professionals and the novices.

The "Professionals" fit the following profile:

they trade completely objectively using mathematical models to arrive at trading decisions, there is no emotion involved;

their ideas are well researched to ensure their strategy has a definable edge;

they follow trends in prices, by controlling their risk and allowing profits to accumulate;

they realise the market is not predictable, so employ techniques that will profit by recognising trends, rather than anticipating them.

The "novices" fit the following profile:

their trade strategies are usually based on esoteric analytical techniques that are highly subjective, making it difficult (if not impossible) to determine the provision of an edge;

they have a pre-occupation with forecasting prices or dates on which trends in the markets will reverse (ie a belief that the markets are predictable);

by design, their subjective strategies make a disciplined trading approach difficult as it is too easy to "bend the rules";

they pay little attention to risk control and money management.

One final quote:

"Winners hold their winning trades, losers hold their losing trades"

All the best!
Saint

 

[uasish]

Hope now the perspective be clear .

 

[oilman5]

thanks once again,
showing the class cv/saint/ traderji
..............uasish/beginner av...next level trader......
.................mass quasi trade learner...[including self]..some profit ..some loss.
.........for new...avid reader...supplier of money in food chain

 

[aijaz159]

if u have a winning trade... say buy 1 lot @110, place 1st stoploss according to fib. ratio. then suippose ur stock move upwards then add one more lot to @120, then add more if it again it moves to @134, 137 then place the @134 ur stop loss...... suppose on the next day mkt crach, then ur stoploss 134 triggerd then sell the whole lot... at once and looks for another profitable trade. This way u always ride on a winning horse.... never come out with a small profit...

ThanksBro, a good peice of advise.
ajaz.

 

[Raju]

Hi abhinav ,
I also follow booking profit with simple assumptions for the day and then keep watching the stock.
Can you inform me abt good broker for BTST as presently I am with Sharekhan
and I always face auction if I do BTST..
I assume u did these in cash ...

 

[basab19]

After a trial and error I have developed an idea about how to close a successful Trade ?
It is a "reasonable profit" that should be honoured. The Market movement cannot be measured by any effective tool in Real-Time Trading environment. The guiding factor is to earn profit in 3 steps :
(i) Be mentally prepared when your asset has attained a 30% profit, Pocket it. Study the market. If it appears some stability, then (ii) target for another 10% profit over and above (i). Again look close to the market movement, if it still somewhat stable and progressing well, then (iii) sell out after adding another 5% over and above (ii). You may achieve good profit. Always look at the market closely and ensure it is sailing well. This fits well in a BULL Market. In case of BEAR Market, Step (i) is enough for an investor - however, you have to target 20% - 30% profit on the cost value of your asset.

 

[fast_rizwaan]

There is no GTC order in NSE (Good till cancel/close) order which can let your stop / trailing stop in the system.

then what if tomorrow, market crashes at 9:55 am.. how are we going to save our capital..?

I don't know much about futures.. is there a way to put stoploss which works for days not just for intraday?

please enlighten.. thanks.