Many Traders want to trade with Margins, eventually they do not like to Stop Loss, so they Get Forced Sold. Forced selling is a regular business, Stop Loss is not. There are nefarious reasons to say that Stop Loss is unachievable in our market. But Forced selling is achievable in front of the eyes of those guys.
If I tell you that you must allocate only 1 to 2% of your trading capital for each trade, how many of you, who are reading this post would like that? But 99.99% of Traders, would not only put their entire trading capital for trading, on top of it they borrow through margin as well. Some big wigs would negotiate rates to trade with borrowed capital.
The reason why I risked to list out short term trade ideas was because, trading based on buy, sell, stop rules work. It has worked internationally, and works locally too. The one who follow the rules, will not get frustrated and lost. Instead they are satisfied, and upright, holding their heads high, as they know that it will be rewarded.
The following image explains it all in a snap shot. In this example, the trader has allocated a capital of Rs.100,000/=. The % assigned per trade is just 1.25%, translating to an amount of Rs. 1,250/=. Remember you can buy any amount of shares in the market from 1 share to millions right. So you can buy shares to that little value of Rs. 1,250/=. Then if you go through the image you will notice that there had been 40 trades. 13 had been winners, 20 had been losers, and 7 are still open. This shows that the trader who followed this had been somewhat a busy Trader. Now a critic could say that having 40 trades, with 20 losers was a bad effort. Yes it was bad but is it the case when you see the loss he has taken. The loss is just 874.47 after cost. Losing that amount is peanuts, when compared to the allocated capital. If you look at the Cash in Hand row, you will notice that he has Rs. 99,125.53, out of which he has allocated Rs. 8750.00 for his open trades. By pursuing this discipline, he can always fine tune his strategies, and look forward to enhancing his returns. After all the important factor is that the market didn't help traders at all thus far in 2018. As such he could compare the ASI loss against his loss, which is once again proving that his approach is well ahead of the performance of the Market. If you take the 2018 open of the ASI and the close on 29.06.2018, Index has fallen 2.74%. If you take the Year high and the low, ASI has fallen 6.54%. But this Trader with Rs. 100,000/= allocation has lost only .87%. So this guy with 20 losing trades has lost only that amount. What about you? When the ASI has fallen by those % did you gain more than this trader from your trading? If yes I respect you, and I know you are a disciplined, and a mature trader. If not what have you got to tell yourself???
You can access my Short Term Trades here:
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