Well friends, a lot has been said about how to spot the right opportunities for entering a position but much less has been set about how and when to exit a position. Many a times, even good traders get over-zealous and set very high targets which can prove to be their nemesis. What you should keep in mind is that money is the fuel of stock markets. When that dries up, the upmove fails and nobody can predict when or why that happens. So its not wise to set very high targets. Secondly, some traders who are afraid of running into loss, set very tight stop-loss levels. That can prove counter productive because nobody has been able to predict the bottom of markets. Price can move sideways or can go down after you take a position and you cant help it. However, setting just the appropriate target and stoploss can improve your rate of success.
My experience has been that a target of 4-6% on a weekly basis is a healthy one, depending on which stock or index you are looking at. Some stocks like SBI, RELINFRA, & TATAMOTORS can give very good range while others like INFY, ICICI BANK, HINDALCO, etc give a lesser range.
Stoploss should be equal to the target that you have set.
Considering that most good traders will succeed in 7 out of 10 trades, you can expect a draw-down of max 18% and a gain of 42% in your portfolio (based on 6% stoploss & target). Nett profit therefore will be 24% maximum.
Try to use this method and I am sure that you will succeed
[A basic that is taken for granted here is that your direction sensing abilities are working well and whatever method you have adopted is dependable.]
HAPPY TRADING !!!!
My experience has been that a target of 4-6% on a weekly basis is a healthy one, depending on which stock or index you are looking at. Some stocks like SBI, RELINFRA, & TATAMOTORS can give very good range while others like INFY, ICICI BANK, HINDALCO, etc give a lesser range.
Stoploss should be equal to the target that you have set.
Considering that most good traders will succeed in 7 out of 10 trades, you can expect a draw-down of max 18% and a gain of 42% in your portfolio (based on 6% stoploss & target). Nett profit therefore will be 24% maximum.
Try to use this method and I am sure that you will succeed
[A basic that is taken for granted here is that your direction sensing abilities are working well and whatever method you have adopted is dependable.]
HAPPY TRADING !!!!