stop Loss

[bvpraveen]

.... however using right sl with stocks like bdrpur chini, dhmpur sugar can help in avoiding the bitter taste in your tea

Hi,

But you were telling that you aren't using SL at all.

Praveen.

 

[muttusagara]

i think its best not to take any long positions in today's market as it has become very volatile as of now, however using right sl with stocks like bdrpur chini, dhmpur sugar can help in avoiding the bitter taste in your tea

For short to mid term trading, yes we can avoid taking long positions, but still there are many stocks that are trading at attractive prices. As fear and greed plays on us, we usually do not take positions when we are supposed to and sell when we are supposed to.

I had missed an oppurtuinity to make neat 20% gain in 2 stocks (RELCOM and Satyam) between Nov to Feb (in 3.5 Months) because of greed and fear. Of course this is a post analysis, I hope others do agree with me.

Also note during this time frame (Nov to Feb) also we had seen some sort of Volatality... Once because of CRR hike by RBI and once becuase of some problem in Thailand Stock market. As I have observed in these volatile market, only a sharp trader makes lot of money... of course with right tool.... for which I am searching still
muttusagara

 

[innocent_trader]

Hi,

But you were telling that you aren't using SL at all.

Praveen.

hi praveen,
i've never used stop loss, however i've been trading for less than 2 months so maybe i'll learn later however my relationship manager at indiabulls tells me not to use sl unless im trading with billions , however from going through all the threads here and also from watching all the business channels like ndtv profit, zee business etc. i think one should use stop loss wisely but not very frequently, esp. since im into day trading so using stop loss seems like start loss

 

[bvpraveen]

hi praveen,
i've never used stop loss....(

Hi,

So when your stock is going down, when you will exit?

Praveen.

 

[innocent_trader]

Hi,

So when your stock is going down, when you will exit?

Praveen.

it happened a couple of times, but i was able to transfer the stocks from intraday to cash and hold for a day or two n stocks bounced back really soon and i was able to make some profit also. still can't comment on the possibility that the stock may not bounce back, guess i'll have to go with a loss then, but i'll try to average by buying at lower levels then, like i did a few times before also, ie. i bought 200 jet airways yesterday at 629 and the price went down further to 618 and i bought 200 more at around 622 so the price went around 627 for 400 shares, and then sold in fear of a big loss at limit 628, but seconds after that stock bounced to 640 i suffered a loss of around rs.440 because of my fear of losing more, and also i missed over 3000 rs profit in that trade
plz comment

 

[bvpraveen]

it happened a couple of times, but i was able to transfer the stocks from intraday to cash and hold for a day or two n stocks bounced back really soon and i was able to make some profit also. still can't comment on the possibility that the stock may not bounce back, guess i'll have to go with a loss then, but i'll try to average by buying at lower levels then, like i did a few times before also, ie. i bought 200 jet airways yesterday at 629 and the price went down further to 618 and i bought 200 more at around 622 so the price went around 627 for 400 shares, and then sold in fear of a big loss at limit 628, but seconds after that stock bounced to 640 i suffered a loss of around rs.440 because of my fear of losing more, and also i missed over 3000 rs profit in that trade
plz comment

Hi,

I'm not the right person to give precise advise/comment.

Just my view:
I'm afraid you are making some mistakes.
1. No stoploss - Very serious mistake. In your example, Jet Airways, just imagine your loss when the price had dropped to still lower level in a short span of time.
2. Averaging down - ie adding more positions when the price drops. Usually one does averaging up, ie adding more position when the price moves up, say near pivot low,etc.

Praveen.

 

[vince]

Hello innocent Trader,

IMHO you are doing everything that a trader should not.

Trading without a stop loss.

Listening to your RM.

Averaging on the way down.

Looking at too many business channels.

God help you.

Regds

 

[innocent_trader]

Hello innocent Trader,

IMHO you are doing everything that a trader should not.

Trading without a stop loss.

Listening to your RM.

Averaging on the way down.

Looking at too many business channels.

God help you.

Regds

hi vince,
i've stopped listening to my RM, and i know im making many mistakes in trading, but hope to correct them in due time. can you tell me how to use the right stop loss, ie on a stock of 875 rs where should i put a stop loss?

thanks in advance

 

[bvpraveen]

hi vince,
i've stopped listening to my RM, and i know im making many mistakes in trading, but hope to correct them in due time. can you tell me how to use the right stop loss, ie on a stock of 875 rs where should i put a stop loss?

thanks in advance

Just try this article. I find it interesting.

http://thepatternsite.com/stops.html

Praveen.

 

[uasish]

Hi,
It is an eternal debate where to enter ? after the entry where the SL would be ? %,ATR,SAR ,2nd Support etc.etc.Without money management in place day traders are rare species becoz they extinct fast,i was exactly in the same mind frame " Phas gaya to delivery utha lia",few yrs back .It is better to think in this way that out of 10 trades i am going to loose in 7 ,(go through all the trades Larry made ,in his famous consequtive 3 yrs retainment of world's best trader,you will find he lost in 4 trades out of 10,hence my winning trades can be max 3 nos),now if i take 1/ risk i loose 7/=(keep aside brokerage etc)hence my reward has to be 2.50, becoz 2.50*3(the no of winning trade)=7.50.This is just to keep me afloat,that is the reason why we never cut our winning trades (above that 2.50) but trail it with SL.So it is better to accept that my winning streak as a trader is max 30%,hence i will never enter those trades where reward is limited to max 3/= vis a vis my risk of 1/=.Better to cite an example : Colgate's chart wath the next Fib
level (expected resistance) & think where will we have to place our SL,no worth taking this ,rather if the next Fib level is taken conclusively it is prudent to enter with that Fib level as SL.
Asish