pzanzane
Long

Swing Long NMDC

NSE:NMDC   NMDC LTD
NMDC long E - 124.5 , Stoploss - 117.35 Target- 142
Trade active

Comments

For the target of 142, how can i estimate the timeframe? Sorry, new to this. I am holding 100 qty at 133. At what price I avg and exit in 140+?
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pzanzane hiteshmehta
@hiteshmehta,
Q- how can i estimate the timeframe?
A- You cannot. Nobody knows how much time it can take. Wild guess will be couple of months may be.

Q - At what price I avg and exit
A- I don't average once I am in trade. Because there is always a chance that trade doesn't work and hit a stoploss. So why waste more money on brokerage. Just hold it till Stoploss or target.
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pzanzane hiteshmehta
@hiteshmehta, And since you are new to this, I would like to advice.

You need to decide 4 things before getting into a trade.

1. Amount of money you are ready to lose if trade doesn't work.
2. Entry price and stop-loss price of your trade
3. Target Price, based on Reward to risk ratio. It should not be less than 1:2
4. Position size = Quantity of shares you are going to buy for specific trade

E.g.

1. Hitesh ready to lose 1000 Rs, if trade does not work i.e. Trade hits its stop-loss.
2. Entry price is 124.5, stop-loss price is 117.35
3. Deciding target price -
T.P. = E + (E - SP)*2

T.P. = 124.5+ (124.5-117.35)*2 = 124.5+7.15*2 = 138.8

4. Deciding Position SIze
PS = Risk Money/(E-SP)
PS = 1000/7.15 = 139

Quantity of shares for this specific trade will be 139.
In the case your trade doesn't work and hits stop-loss you will lose 1000 rs.
In the case your trade doesn't work and hits Target you will make 2000 rs.

Risk to reward ratio
1000:2000 i.e. 1:2

Note: Brokerage and taxes are not taken into consideration for simplification of calculations.
Make sure that you keep your risk money no more than 1% of capital and keep risk money same for all trades for specific period of time.
i.e. don't fluctuate your risk money just because you got couple of trades right or wrong. This is the only way to win in terms of probability.
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hiteshmehta pzanzane
@pzanzane, Thank you for this insightful details. I really appreciate.. Will start trading based on these disciplines. :)
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pzanzane hiteshmehta
@hiteshmehta, Welcome, follow me for more trades
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hiteshmehta pzanzane
@pzanzane, Followed. Any other medium I can follow you for call updates? (Twitter / WhatsApp / Telegram)
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pzanzane hiteshmehta
@hiteshmehta, to stay connected sign up on quora and follow my blog , https://zanytrades.quora.com
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