- Read what the market is telling you, not what you predict the market will do. If the market is falling, don't enter on the assumption it will turn around. Wait until it actually turns around on significant volume, then make your entry.
- Do not risk more than 2% of your trading account on any one trade. This is not the total amount of the trade, this is the amount you allow yourself to lose before getting out the trade. Look up "risk of ruin" to understand why.
- success depends on limiting your losses. If you win only 50% of your trades, you can still make money if you make $3 on the wins and lose only $1 on the losses.
I suggest you read, "The Way of the Turtle" to develop a true understanding of the risks and probablilities involved in day trading.
You will ultimately discover as I have, that commissions and taxes make frequent trading in and out a losing proposition for 98% of the people.
- Your strategy lacks limiting your losses. When you enter, you should know when you are getting out if the trade goes against you. (Remember the concept of losing only $1 and winning $3 to make money on a 50% probability).
- I also quit looking for stocks to trade. I settled on trading QLD and QID. QLD makes money when the market is going up. QID makes money when the market is going down and loses money when the market is going up.
seemingly true no.Stop loss is not entirely correct vystavlen.Vash stop can just carry on playing ponizhenie.1.499, 512 more ...
I want to discuss my intraday stock trading strategy. I am new to the market and doing my research work at the moment to get on with it.The strategy is based on what i have learnt till now.....
Here,
Consider a stock X of Rs500 (a volatile share)
Now suppose it gains Rs 5 and reaches Rs505 on on some time of the day.
This is where I come in. Supposing that the stock is gaining on that day and moving with the market I decide to put a limit order of 1000 shares of Rs506.
Now as an when the share reaches Rs506 my deal will be activated. Now as the stock is moving up lets say its deviates Rs 0.5 and reaches Rs506.5 i can immeditely sell the stock with a profit of Rs500 (1000*.5 = Rs500)
To prevent huge losses i ll olways use stop loss ( in this case Rs505.5)
2 - 3 trade like this a day can fetch me good profit daily.
Strength:
1. I continue with the market trend and try to book only small profits.
2.I use stop loss strictly to prevent huge losses.
Weekness:
1. I ll incur loss only if the limit price i choose is the Highest price the stock goes to attain on that day, for which i have used a stop loss.( probability that the price i choose will olways be day`s high is almost negligible [ i think ].
Thnak you.
This is just on the basis on what i have learnt uptill now,
