Hello everyone!
Now is the best time to go long in SKFINDIA. I have been tracking this stock since July'22 and it has given a fabulous one sided rally of 35% since then, it is going through consolidation from last 2 month(pl. go through chart for probable target and SL). Someone might consider it after breakout from trendline but I personally prefer a low risk setup even with slightly less probability as after breakout the probability will increase but the risk to reward will be not as good as now.
Let us understand this through example:
Consider 2 setups, one with low RR and high wining % and another setup with considerably less winning % and high RR.
RR ratio Wining %
1st Setup 1:3 90%
2nd Setup 1:6 60%
Now before doing calculation let us pre-assume a few things;
Total Capital - ₹1000
Maximum risk he/she take per trade - ₹20
After 10 trades:
For 1st Setup;
1 trade will hit SL since setup has 90% accuracy.
so, total loss = ₹20
As the setup have RR of 1:3
So, target for each trade will be = ₹20x3 = ₹60
In 9 trades target will be achieved.
So, total gain = ₹60x9 = ₹540
Similarly for 2nd Setup:
No of losing trade = 4
Total loss = ₹20x4 = ₹80
Target for each trade = ₹20x6 = ₹120
No of winning trades = 6
Total gain = ₹120x6 = ₹720
Total loss Total gain Net Gain ROI
1st Setup ₹20 ₹540 ₹520 52%
2nd Setup ₹80 ₹720 ₹640 64%
Now you may make your decision.
Thanks!
Now is the best time to go long in SKFINDIA. I have been tracking this stock since July'22 and it has given a fabulous one sided rally of 35% since then, it is going through consolidation from last 2 month(pl. go through chart for probable target and SL). Someone might consider it after breakout from trendline but I personally prefer a low risk setup even with slightly less probability as after breakout the probability will increase but the risk to reward will be not as good as now.
Let us understand this through example:
Consider 2 setups, one with low RR and high wining % and another setup with considerably less winning % and high RR.
RR ratio Wining %
1st Setup 1:3 90%
2nd Setup 1:6 60%
Now before doing calculation let us pre-assume a few things;
Total Capital - ₹1000
Maximum risk he/she take per trade - ₹20
After 10 trades:
For 1st Setup;
1 trade will hit SL since setup has 90% accuracy.
so, total loss = ₹20
As the setup have RR of 1:3
So, target for each trade will be = ₹20x3 = ₹60
In 9 trades target will be achieved.
So, total gain = ₹60x9 = ₹540
Similarly for 2nd Setup:
No of losing trade = 4
Total loss = ₹20x4 = ₹80
Target for each trade = ₹20x6 = ₹120
No of winning trades = 6
Total gain = ₹120x6 = ₹720
Total loss Total gain Net Gain ROI
1st Setup ₹20 ₹540 ₹520 52%
2nd Setup ₹80 ₹720 ₹640 64%
Now you may make your decision.
Thanks!