If
Success is a Game,
These are the
Rules
Discipline
Discipline is doing right thing at the right time...every time! Survival in this business is dependent on the right decisions.
Risk Management
Always use stop loss. Don't hold or average loosing position.
Discipline is doing right thing at the right time...every time! Survival in this business is dependent on the right decisions.
Risk Management
Always use stop loss. Don't hold or average loosing position.
Position Sizing
Take only 1% risk of your total capital.
Suppose you have a portfolio of Rs.100,000 and you decide to only risk 1% on a trading idea that you have. You are risking Rs. 1,000.
Now suppose you decide to buy a stock that was priced at Rs.23.00 per share and you place a protective stop at Rs.19, which means that if the price drops to Rs. 19, you are out of the trade. Your risk per share in Rs. is 4. Since your risk is Rs.4, you divide this value into your 1% allocation (Rs 1,000) and find that you are able to purchase 250 shares. If odd figure comes them round down to the nearest share.
Now suppose you decide to buy a stock that was priced at Rs.23.00 per share and you place a protective stop at Rs.19, which means that if the price drops to Rs. 19, you are out of the trade. Your risk per share in Rs. is 4. Since your risk is Rs.4, you divide this value into your 1% allocation (Rs 1,000) and find that you are able to purchase 250 shares. If odd figure comes them round down to the nearest share.
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