Profit & Loss

[Dasarp]

Hello,

here u go point wise.

1).first don't use fixed lots ...its never works.... to trade fixed lots the system needs to robust enough to take biglosses.(atleast 60 to 80 % success rate).

2).yes fear of loosing alway's there for a trader to conquer that u need to be very disciplined...just go trade after trade don't try to recall what happend to earlier trades.build courage in urself to train urself.... lets profit run rule.

3).yes ur right our markets are built such type only...if big players see we are holding trades overnight they simply take out our stops and go in our intial direction...this is the fact and u need to accept it and trade accordingly.
see our markets are not continuous like overseas markets are .....right now our markets are not suitable for Intra players.accept this fact and change ur Strategy accordingly.

4)use whatever Analysis (by using index or script)...don't loose more than ur intial risk allocated to any trade(sometimes it happen's by big spike...but on an average u need to loose only amount u risked for that trade...this is very important)

5).if u use fixed lots u will get this kind of results only...instead use % risk to ur stoploss point. u will get better results.....or ucan use % percentile volatality method for ur position sizing.

regards.

Thank you for your suggestions and i definitely follow and concern these suggestions.

and one more thing... how can i handle volatility with my small capital
Ex: if i enters a trade in silver with 1:2 ratio... that sl is going to hit always because of the small target and sl (i usually targets for 150-200 points and the stoploss is about 100 points.. in this case sl will hit always)

 

[jahan]

Thank you for your suggestions and i definitely follow and concern these suggestions.

and one more thing... how can i handle volatility with my small capital
Ex: if i enters a trade in silver with 1:2 ratio... that sl is going to hit always because of the small target and sl (i usually targets for 150-200 points and the stoploss is about 100 points.. in this case sl will hit always)

Hello,

trading is not done like u specified in ur example ...its not wise decision to put 100 point stop to gain 150-200 point(when u don't know how much is market going to give)... market always not in a situation to give u exact logical profits...infact market doesn't care logic it is three dimensional in nature.Apply logic for risk management not for markets.

ur trading method should be in a such way that it should give as much as profit when chance is there and u need to control ur risk when market doesn't giving or producing big wins.this is the only secret to conquer the markets.

when come to small capital .......there is no room for insufficient capital in trading(whether u trade for learning or for earning)...u need to know ur minimum capital that can give u atleast 1 lot for ur defined risk based on ur position sizing method. (look what happened to "the predictor" of Sureshot thread once again he gone silient)

if u want more information on position sizing let me know ....i will explain to u in detail.

Regards,

 

[Dasarp]

Hello,

trading is not done like u specified in ur example ...its not wise decision to put 100 point stop to gain 150-200 point(when u don't know how much is market going to give)... market always not in a situation to give u exact logical profits...infact market doesn't care logic it is three dimensional in nature.Apply logic for risk management not for markets.

ur trading method should be in a such way that it should give as much as profit when chance is there and u need to control ur risk when market doesn't giving or producing big wins.this is the only secret to conquer the markets.

when come to small capital .......there is no room for insufficient capital in trading(whether u trade for learning or for earning)...u need to know ur minimum capital that can give u atleast 1 lot for ur defined risk based on ur position sizing method. (look what happened to "the predictor" of Sureshot thread once again he gone silient)

if u want more information on position sizing let me know ....i will explain to u in detail.

Regards,

Hi Jahan,

I would love to know every detail regards trading and from this forum (I am a newbie & always like to learn)... please be explain

 

[jahan]

Hi Jahan,

I would love to know every detail regards trading and from this forum (I am a newbie & always like to learn)... please be explain

Hello,

here u go.....

some of the most Commonly used/basic position sizing methods....from these one can derive "N" no of position sizing methods.

1).fixed size: same no.of contracts/shares applied in each trade......e.g. 100 shares or 2 lots .

2).fixed amount of equity: a fixed amount of account equity is needed for calculation of no.of contracts/shares....eg..RS5000....

3).fixed fractional(also known as fixed percentage risk):it is the Amount of percentage on ur account equity on each trade......eg 2% risk of account equity.

4).fixed ratio: the no.of contracts or shares increases by one each "delta" amount of profit earned per contract......eg..if u decided ur delta is 2000rs for every 2000rs unrealized profits u keep on increases ur contracts/shares.

5).percent Volatality.it is the percentage of ur equity plus the Average true Range multiplier which decides ur no.of contracts/shares per trade.....eg...2 % of ur equity and 3*ATR ....which means u allotted ur contracts/shares based percentage of ur equity at a distance of 3*atr from ur entry point.

6).percent support and resistance: it is the same as percent volatality except it uses prior support and resistance as ur distance from entry point to the percentage of ur equity.

these are the basic ones ....there are also Martingale and Anti-martingale methods in which Anti-martingale works best in trading ...martingle methods are popularised by gambler's.

for the beginner i suggest 5) and 6).... infact for anyone these two methods works really well.(what i observed/experienced in trading over the years).

if one knows how his trading system works on certain market conditions ..he can apply more advanced position sizing methods...which depends on his objectives/goals ....again its totally depend on trading system results for scale in/scale out/pyramiding or by combining above methods to reach the trader objectives.

Regards,

 

[Dasarp]

Hi Jahan, thank you for the details... i think im onto the first 3 points upto now

5).percent Volatality.it is the percentage of ur equity plus the Average true Range multiplier which decides ur no.of contracts/shares per trade.....eg...2 % of ur equity and 3*ATR ....which means u allotted ur contracts/shares based percentage of ur equity at a distance of 3*atr from ur entry point.

would you give an example for the above point.

 

[jahan]

Hi Jahan, thank you for the details... i think im onto the first 3 points upto now



would you give an example for the above point.

Hello,

Uploaded with ImageShack.us


so now we got two things ,stoploss point and entry point (from the above chart)
based on this we need to calculate our position size

no.of shares/contracts=(ur percentage risk*toal equity)/(stoploss points).

but Eur/usd trade in lots so...

no of lots=(no.of shares or contracts)/lot size denominator
for Eur/usd 1000 shares/contracts= 1 micro lot.
10000 shares/ontracts=1 mini lot
100000 shares/contracts=1 standard lot.

Regards,

 

[ashu1234]

Very nicely put up by jahan by giving working example of ATR in determining range or market and sl based on that. I also use ATR intensively in different variations for position sizing as well as stops management.

See the instrument which you are trading like gold and silver on mcx, they have a wide range, so to take a trade first you have to make sure how you identify trend (fundamental or technical) once you made up your mind that you want to go short in say Silver for e.g, choose your preferred time and watch its atr, also note the previous pullbacks and try to co-relate it with atr, if you want to go in deep, please try to notice different data releases in major market and their opening which gives sudden spikes and at many times take our your atr stop losses on mcx.

So placing a sl based on atr is a good idea, but you have to combine it with our market conditions to trade, which you will learn in due course of time.

All the best.:thumb:

 

[ashu1234]

Hello,

trading is not done like u specified in ur example ...its not wise decision to put 100 point stop to gain 150-200 point(when u don't know how much is market going to give)... market always not in a situation to give u exact logical profits...infact market doesn't care logic it is three dimensional in nature.Apply logic for risk management not for markets.

ur trading method should be in a such way that it should give as much as profit when chance is there and u need to control ur risk when market doesn't giving or producing big wins.this is the only secret to conquer the markets.

when come to small capital .......there is no room for insufficient capital in trading(whether u trade for learning or for earning)...u need to know ur minimum capital that can give u atleast 1 lot for ur defined risk based on ur position sizing method. (look what happened to "the predictor" of Sureshot thread once again he gone silient)

if u want more information on position sizing let me know ....i will explain to u in detail.

Regards,

Well like to elaborate on above point(I'm not anyway related to PR, but liked his insight).

You may be right that his call had wide stops, or at times no stops, but at the start of the thread itself we had a long discussion that to trade heavy volatility scrip sometimes we need to place wide stop loss to play out big swings, people hated here coz most traders here are retail traders who are unable to trade on large time frame and with wide stop losses as strictly pointed at the start of the thread. So In my opinion his last call was also not a bad one though a bit extended and his interest in maintaining thread has faded for the reason we can speculate but its not fair to comment that he failed, please all take my point in true trading spirit. I've made my point, only add meaningful discussions

 

[jahan]

Well like to elaborate on above point(I'm not anyway related to PR, but liked his insight).

You may be right that his call had wide stops, or at times no stops, but at the start of the thread itself we had a long discussion that to trade heavy volatility scrip sometimes we need to place wide stop loss to play out big swings, people hated here coz most traders here are retail traders who are unable to trade on large time frame and with wide stop losses as strictly pointed at the start of the thread. So In my opinion his last call was also not a bad one though a bit extended and his interest in maintaining thread has faded for the reason we can speculate but its not fair to comment that he failed, please all take my point in true trading spirit. I've made my point, only add meaningful discussions

Hello,

Ashu1234 bhai ...come on man ...iam not at all against "PR",what i didn't like is when he say "target diye jate hain,jitni shraddha ho utni ley".is it make any sense.see in my opinion prediction is only suited for pandits,trader needs to Anticipate rather than prediction.

when come to stoploss placement...if its very wide i will simply decrease the position sizing based on percentile volataity/percent supp&resi,if then also my method didn't give any lots to trade i simply pass on the trade and wait for another trade,those who didn't have that much patience what u or i can do tell me.see u know and i know markets will always there what's wrong in waiting for low risk high reward trade.i never ever force a trade.

in my opinion ....what trade call providers/tip providers do ..by just giving the entry point and 3-4 targets,and stoploss...do u think is it enough for a trader..in my view its not...b'coz they are doing the easy part of trading ...and u know trade management is the difficult part and we are bearing it.
this is the only reason why tips provider calls fail..iam not saying there analysis is wrong what iam saying is... they are just doing easy part,and leaving difficult part on trader's.

iam little or not at all interested on entries(any system can do the job)....i only work hard on my exits which includes trade management and i don't know how to anticipate target's i let the market to prove it's reversing against my position,then i will exit the trade.

Again iam not at all Against "PR" and his Analysis,what my suggestion to him is if he apply his knowledge on any continuous futures markets he will be proud of his skills.

Regards,

 

[ashu1234]

Hello,

Ashu1234 bhai ...come on man ...iam not at all against "PR",what i didn't like is when he say "target diye jate hain,jitni shraddha ho utni ley".is it make any sense.see in my opinion prediction is only suited for pandits,trader needs to Anticipate rather than prediction.

when come to stoploss placement...if its very wide i will simply decrease the position sizing based on percentile volataity/percent supp&resi,if then also my method didn't give any lots to trade i simply pass on the trade and wait for another trade,those who didn't have that much patience what u or i can do tell me.see u know and i know markets will always there what's wrong in waiting for low risk high reward trade.i never ever force a trade.

in my opinion ....what trade call providers/tip providers do ..by just giving the entry point and 3-4 targets,and stoploss...do u think is it enough for a trader..in my view its not...b'coz they are doing the easy part of trading ...and u know trade management is the difficult part and we are bearing it.
this is the only reason why tips provider calls fail..iam not saying there analysis is wrong what iam saying is... they are just doing easy part,and leaving difficult part on trader's.

iam little or not at all interested on entries(any system can do the job)....i only work hard on my exits which includes trade management and i don't know how to anticipate target's i let the market to prove it's reversing against my position,then i will exit the trade.

Again iam not at all Against "PR" and his Analysis,what my suggestion to him is if he apply his knowledge on any continuous futures markets he will be proud of his skills.

Regards,

Hi Janan bhai,

Totally agree with all of your points . Actually never meant to say you are against PR, I only wanted to discuss the trade setup. and imo you are among very few traders here who have deep insight to trading and who are able to put it up in a systematic way.

Yes, rightly said that trade management is the most difficult part and I also share the same view that we need to trail our positions until market tells or proves otherwise if we don't do that there will never be any big win.

Even I sometime try to chart out trading plan here in some of my threads taking into account the broad trend, what I do is open position in the expected range(for me entry is important as well) and they I trail positions if position goes in the desired direction, but I add one more dimension in my positions, I churn positions(part of lots) in between to stay profitable. So even if my original stop loss/trailing stop gets hit, at times I manage more profit then t-2 or t-3.

For me Entry(positional or say broad view is also important), it requires daily tracking of fundamental developments and add to it technical swings in Indian market to enter correctly or not. I know you hate to trade in Indian market, but everybody here don't have luxury or say enough resources to trade on forex.

So even a move in USDINR of 1rs in a day upsets every trade setups and entries, and all we left up with managing positions according to that. And Indian instrument fare poorly for position sizing for retailers, liquidity in mini contracts is poor and some instruments don't have mini contract at all.

To conclude trading indian market is hell of a work for a systematic trader, and trading here and to deliver is quite a task. I'm trading gold and natural gas against two extremes and those who trade know how real trading on mcx now a days is.

I always enjoy your systematic inputs.....keep it coming. Do provide your inputs for commodities if you can.

:thumb: