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Trade Management

HOW LIQUIDITY WORKS!In trading, liquidity refers to how quickly and easily an asset can be bought or sold in the market without significantly affecting its price. It reflects the availability of buyers and sellers and the volume of trading activity for a particular asset. Key Aspects of Liquidity: 1. High Liquidity: The asset can be traded easily with minimal price changes. Common in popular markets like major stocks (e.g., Apple, Tesla), forex pairs (e.g., EUR/USD), and widely traded cryptocurrencies (e.g., Bitcoin). 2. Low Liquidity: It’s harder to find buyers or sellers, leading to potential delays or price changes during transactions. Common in niche markets, lesser-known stocks, or illiquid crypto tokens Importance in Trading: Efficient Price Discovery: High liquidity ensures prices reflect market demand and supply. Lower Risk: Traders face less risk of slippage (unintended price changes during execution) in liquid markets. Flexibility: Allows traders to enter or exit positions quickly, especially important for day traders and scalpers. In summary, liquidity is crucial for smooth and cost-effective trading. #Stockmarketeducation
NSE:HCLTECHEducation
by Sateesh07
JSW INFRA : Breakout or VCP formation#JSWINFRA #breakoutsoon #Vcppattern #swingtrade JSWINFRA : Breakout or VCP Formation - there are 2 scenarios Breakout Scenario : >> Enter with 30% of position Sizing now >> If Breakout happens u wont be in FOMO >> If Breakout Sustains u can add more win Retest or Retracement >> Swing Traders can look to book close to 10 % profits VCP Formation : >> Enter 30% position sizing now >> If it starts falling, Its a Confirmation of VCP formation >> Start Accumulatig during the Downpart of VCP >> when VCP upside Starts it can Give Good Spike >> In Case of VCP Breakout, Swing Traders can Look to target min 10-15% profits. I want you all to Observe this stock setup and see what scenario plays out. If u Like the Setup & analysis, Pls give us a Boost, Comment & Follow us Disc : Charts Shared are for Educational purpose, so that u can Learn how to analyse Stocks and How u can plan ur Entries etc. Do not take position in it unless u consult ur Financial advisor also do ur own analysis
NSE:JSWINFRALong
by moneyfesttrading
1
Rahul's Road to Recovery: Battling Overtrading"Rahul's Redemption: Overcoming the Pitfalls of Overtrading" Once upon a time, in the bustling city of Mumbai, there lived a man named Rahul. Passionate about trading, Rahul was determined to make a fortune in the stock market. However, as the saying goes, "Too much of a good thing can be bad," Rahul found himself entangled in the web of overtrading. Rahul's journey began with zeal and promise, but his desire for quick gains led him down a perilous path. He succumbed to the allure of constant market action, making trades impulsively and without a solid strategy. The euphoria of potential profits clouded his judgment, and soon, the losses began to accumulate. In the depths of despair, Rahul realized he needed help. He turned to a mentor, an experienced trader named Aman, who empathized with his predicament. Aman had walked a similar path in his early days and understood the challenges Rahul faced. The Turning Point: Aman became Rahul's guiding light. He emphasized the importance of discipline and the dangers of overtrading. Together, they analyzed Rahul's past mistakes, identifying the triggers that led to impulsive decisions. Problem and Solution for Overtrading: - Problem: Overtrading occurs when a trader executes excessive transactions, often driven by emotions or the need to be constantly active in the market. - Solution: 1. Establish a Trading Plan: Define clear entry and exit points, risk tolerance, and profit targets before entering a trade. 2. Set Realistic Goals: Avoid the temptation of unrealistic profit expectations. Focus on consistent, sustainable growth. 3. Use Stop-Loss Orders: Implementing stop-loss orders helps limit potential losses and prevents emotional decision-making. 4. Regularly Review Trades: Analyze past trades to identify patterns and learn from mistakes. Keep a trading journal for self-reflection. With Aman's guidance, Rahul began to put these solutions into practice. He committed to sticking to his trading plan, embracing patience, and avoiding the impulsive urge to trade excessively. The Moral of the Story: Rahul's journey teaches us that setbacks are a part of the trading game, but learning from mistakes and seeking guidance can lead to redemption. The moral of the story is that discipline, a well-defined strategy, and mentorship are invaluable tools for overcoming the pitfalls of overtrading. As days turned into weeks and weeks into months, Rahul's efforts bore fruit. His trading approach became more disciplined, and he started to see consistent profits. The story of Rahul's redemption serves as an inspiration for every trader navigating the turbulent waters of the stock market. Remember, in the world of trading, it's not about the frequency of trades; it's about making the right trades at the right time.
BSE:SENSEXEducation
by iamrk7
3
Emotions should not affect our trade management systemTrader should identify emotions that are affecting our trading management decisions, and find genuine solution to over come from the same to become a better trader. Most investors treat trading as a hobby because they have a full-time job doing something else. However, If you treat trading like a business, it will pay you like a business. If you treat like a hobby, hobbies don't pay, they cost you...! Disclaimer. I am not sebi registered analyst. My studies are for educational purpose only. Please Consult your financial advisor before trading or investing. I am not responsible for any kinds of your profits and your losses.
NSE:NIFTYEducation
by RK_Chaarts
4
Nath Industries - Trading in a good support level🔴DISCLAIMER ***** It's just for an educational purpose, So you must also follow your own technical analysis before taking up the trades ****** Aggressive traders enter at the breakout and conservative traders may give entry after retracement (Retracement is optional, we cannot expect every stock to take a retest after the breakout, it may also continue to have its bullish pressure after the breakout) Ideal Target and Stop Loss should be minimum 1:2 RRR (Risk reward ratio) After reaching our targets, Book 50% Profits and trail your stop loss to get maximum profits from rest of the 50% in your trade.
BSE:NATHINDLong
by PrakWorld_Traders
Rules to keep in mind while trading to became successful traderMost traders and investors treat trading as a hobby, because, they have a full-time job doing something else. However, If you treat trading like a business, it will pay you like a business. If you treat like a hobby, hobbies don't pay, they cost you...! Anyone who wants to become a profitable stock trader need only spend a few minutes online to find such phrases as plan your trade, trade your plan and keep your losses to a minimum. For new traders, these things can seem more like a distraction than actionable advice. If you're new to trading, you probably just want to know how to hurry up and make money. Each of the rules below is important, but when they work together the effects are strong. Keeping them in mind can greatly increase your odds of succeeding in the markets. Key Takeaways Treat trading like a business, not a hobby or a job. Learn everything about the business. Set realistic expectations for your business. Rule 1: Trade based on Rule, when in doubt, stay out, Always Use a Trading Plan Rule 2: Treat Trading Like a Business, not as a hobby Rule 3: Proper position sizing is the key Rule 4: Use Stop loss never trade based on hope, Protect Your Trading Capital Rule 5: Constantly Analyze your mistakes and try to learn from it, become a student of the markets Rule 6: Think about the risk potential before your reward potential, Risk only what you can afford to lose Rule 7: Develop a methodology based on Facts, The objective is not to buy low and sell high, but to buy high and to sell higher Rule 8: Trend is our real friend so Don't fight the trend Rule 9: Never, under any circumstance add to a losing position Conclusion Understanding the importance of each of these trading rules, and how they work together, can help a trader establish a viable trading business. Trading is hard work, and traders who have the discipline and patience to follow these rules can increase their odds of success in a very competitive areas. This post is just for educational and motivational purpose, See you all next week. 🙂 RK Disclaimer. I am not sebi registered analyst. My studies are for educational purpose only. Please Consult your financial advisor before trading or investing. I am not responsible for any kinds of your profits and your losses.
NSE:TATAMOTORSEducation
by RK_Chaarts
8
Helpful Questions to Ask Yourself.The quality of our life depends upon the quality of the question we ask. I think it's the same with trading also, successful traders ask better questions, and as a result, they get better answers. They get answers that help them to know exactly what to do in any situation to produce the results they desired. Below are the 5 questions that will help you to stay focused and will make sure you do the right things. 1-Did I get in before the market broke? One thing traders do that hurts them is to anticipate breakouts that never amount to anything. Instead of waiting for the market to break, they rush in to buy when it is at the top of its resistance level, hoping for the breakout. You shouldn’t anticipate a breakout every time the market approaches the support or resistance area, but you should be prepared to act if it does. 2-Am I getting in too late? Suppose a breakout happens with a huge candle showing a 6-8% move. We always feel that if we don't act immediately, we could miss a great trade. It’s not always easy for a trader to walk away from a tempting trade, but this is the difference between a high probability trader and a low probability trader. You will be better off missing a few good trades while removing out the mediocre ones as you wait for the trades that have a higher probability with a better risk/reward ratio. 3-Did I use volume or any other indicator to see if the breakout was a high probability one? To increase the probability of a breakout trade working, one can do a few things. By looking at different time frames to see the market more clearly, adding indicators such as the ADX or stochastics to time trades better, using volume to see if a move is substantiated, or adding filters to keep from rushing into a trade, one can improve the odds of capturing a breakout. 4-How much room does it have to go? When a market breaks out of a trading range, a trader should try to estimate the potential move so that he can measure the risk if the trade goes sour. Without a good mix between the two, no trade should be taken. It doesn’t make sense to make a trade with a 100rs potential profit but with a chance of losing 300rs. You need to have realistic ideas on how much each market or stock can give you or cause you to lose on a trade. Use the size of the previous wave, range, or congestion to measure the next move. 5-Should I wait for a retracement? By waiting for the market to test the old resistance line at Point Y one can make a higher probability trade than by chasing it at point X. By waiting for retracement you can trade with a better risk-reward ratio. Sometimes when the volume is strong, the initial move can be stronger and the chances of it retesting the breakout level are diminished, and so one has to let go of that trade. Your goal should be to take the trade with a better risk-reward ratio. Short Summary 1-Be prepared to do something when the market approaches a potential breakout area. 2-Use other indicators to help determine the chance of a breakout working. 3-Use the size of the previous wave, range, or congestion to measure the next move. 4-If the current R: R is good then enter & if not then wait for the pullback.
NSE:HINDUNILVREducation
by Indrajit08
6
How to Execute the Trend trading system?Look for Low risk, High reward, and High Probability setups. – Richard Weissman Scenario Many traders get destroyed by fighting the trend, insisting that the market is due to reverse itself or they try to chase the market. They may try to catch short-term countermoves in hopes of making a few quick points, or they may always look to catch tops and bottoms in hopes of capturing the big moves. All these traders end up trading against the longer-term trend and against the odds. How to find low risk, high reward, and high probability setups? Use of Trend Following indicators for High Probability trading A-Use of Moving average. If you just jump into trades because the market is trending, you will be guilty of chasing the market. You have to remember that the market will never go in one direction nonstop, the market typically congests or retraces after a strong move. When the market is trending and you are looking for a place to get in, wait for it to retrace to one of the moving averages or trendlines. When the price is just riding on the moving average or trendline, your downside risk is smallest because you know you will be out as soon as it breaks the line. B-Use of ADX (only for conformation) The ADX does not tell you the direction of the trend; it only tells you if there is a trend and measures how strong it is. On its own, the ADX lags price action and is not a great indicator, and so one should not use it to trigger trades. Instead, it should be used as a way to get confirmation of whether the market is trending or choppy and how strong it is . The level between 20 and 30 is considered neutral. The higher the level, the stronger the trend. When it is rising, one should trade only in the direction of the trend. When the ADX is below 20, you can consider the market to be choppy and range-bound, and a trending system will not work well, resulting in whipsaws. Things to Remember while Trading with the Trend 1. Know what the trend is. 2. The best trades are made in the direction of the trend. 3. Assume that the main trendline or moving average will hold. 4. The longer the moving average is, the better it defines the trend. 5. Wait for the pullback. 6. Don’t chase the market. 7. Don’t fight the market. 8. Even in the strongest trends there should be some retracement. 9. The closer the market is to the trendline, the better the risk/reward ratio is. 10. Use ADX to determine the strength of the trend. 11. Higher the level of ADX, the stronger the trend, below 20 consider the market to be choppy 12. Hold trades longer in a strong trend. 13. Wait for confirmation of a trendline breaking before reversing position. 14. Know where the Support levels are. 15. Place stops outside the Support levels. Closing Words- A successful trader will trade primarily in the direction of the major trend, waiting for retracements to get in.
NSE:WIPROEducation
by Indrajit08
61
Trade ManagementLast nights price action is a perfect example of the importance of correct risk management. All 3 entries taken last night ran to roughly 3% and then reversed. Due to correct risk management all 3 of these trades resulted in Break even results instead of full losses. Finishing the night at break even instead of -3% is not a huge difference $ wise but also a massive difference mentally. By closing 0.25% of your position at 3% profit you are essentially Break evening your trading while still leaving your stop open and 75% of the position still running.
Education
by Matt-The-Trading-Cartel
Share Trading: Is it a Better Business ?? For Whom ???Put 10k in the market, buy stocks worth 50k or more on leverage and sell at 1k profit which is 10% profit on the investment capital..That's amazing!! Isn't it? The bad part is, the anomalies to this hypothesis adversely impacts more than 90% of time. And the so called 'better business' turns out to be a losing affair for more than 90% of our trading community. Let's first discuss about our losing 90% trading community: A beginner takes his first trade on hunch and wins.. beginners luck..builds confidence..takes second trade and wins..no fear..may be he wins a couple of more and the beginner increases the trade size..over confidence and greed..he starts losing and bursts his account in aggressive attempts to win back profits at first and regain the losses lately. What went wrong with this beginner? Greed prevailed rationality Lack of strategy or Edge in the markets Revenge attitude What about the remaining less than 10% of the trading community? The most successful ones start with a predefined strategy..primary reliance on trade management..patterns and techniques come next..backtesting the strategy..paper trading..followed by real trading..flexible approach as far as the edge in the market is concerned..no fear..no greed..just exact plan execution. So what makes these 10% better over the others? The answer is..some important traits. Let's briefly discuss some of these important traits. Trade management Pros are always ready to miss a trade not qualifying the pre defined risk to reward ratio. Normally 1:1 RRR is good, 1:2 is better and anything higher than that is the best. Not only RRR but trade management also involves trade sizing which is a subset of RRR. Suppose I want to take max. risk Rs. 1000 on a trade. On a particular set up, my stop comes out to be 2 points on a 200 Rs. stock. In this case my trade size would be 500 shares..just an example. Edge in the market OR the strategy which tells where, when and why to buy or sell. It could be a candlestick pattern or a combination of patterns. It could be an indicator buy or sell signal. The key here is to have patience for the signal. If there are multiple confirmations confluencing at the signal, it would be a high probability setup. Our Edge in the market and trade management then go hand in hand to make our day. No fear no greed According to best practitioners it's good to take some profits off the table at first predefined target. B'coz no matter how high probability the set up is, there are always some chances that it could turn out to be a loser. Remaining position can be trailed for substantial bonus gains. If a trade does not go in favor at first instance, just get out at predefined stop without extending losses. Suppressing greed would definitely improve win to loss ratio. Greed kills but fear is a psychological breakdown. Fear bores over-protection in the trader. The trader may miss several best setups due to fear of failure. A beautiful trade missed is as painful as a losing trade. It has been observed that simple breathing exercises have significant impact on our cognitive functionality, which helps in overcoming fear of taking calculated risks. So who can teach the trader the cannons of best trading practices? No one but the trader himself. Of course a good mentor can make things less difficult but it all comes with practice and experience. However, the fact is that, most of us would not learn unless we lose some or most of our hard earned money. Although I deliberately missed some concepts due to time and space constraints yet I hope the brief discussion highlighted important points concerned to share trading. Do hit Like and comment. Trade safe, be healthy. Regards Bravetotrade
NSE:NIFTYEducation
by Bravetotrade
14
9 Smart Money Habits of Warren Buffett That We Should All Learn 9 Smart Money Habits of Warren Buffett That We Should All Learn From How to be like Buffett How did the investor become the third-richest man on earth? With very a disciplined approach to money. Here's what we can all learn from the Oracle of Omaha. 1. Think like an entrepreneur Buffett filed his first tax return at 13. Even as a child, he was always looking for opportunities to earn, beginning with a paper route and selling soda and gum door-to-door. 2. Live below your means When he's "not feeling prosperous," Buffett chooses a $2.95 McDonald's breakfast instead of a $3.17 one. You don't have to go that far, but spending less than you earn is a really good idea, if you can manage it. 3. Love compounding Buffett tells the story of a man who bankrupts a king by asking for one grain of wheat on the first square of a chessboard, 2 on the second, 4 on the third, and so on. Buffett loves the way compounding makes investments grow exponentially. 4. Learn all you can He spends most of his time reading, learning everything there is to know about the markets and companies he invests in. The more you know, the smarter choices you can make. 5. Look for bargains He built wealth by finding companies that were undervalued by the market. Buying assets for less than they're worth and holding on to them until prices rise is a great way to get rich. But it takes study to spot these gems. 6. Think (very) long term One rarely discussed secret to Buffett's success is that he buys quality stocks and holds them for a l-o-o-o-n-g time. He still hasn't sold the stake in American Express he acquired in the 1960s, for example. 7. Don't buy until you're sure Unlike baseball, in which a strike may be called even if you don't swing, investing is a "zero forced strike" game, Buffett says. So don't get pushed into making an investment before you're really sure it's right. 8. Don't follow the herd If you do what everyone else does, you'll get the same results they do. Buffett tells investors to be "fearful when others are greedy and greedy when others are fearful." In other words, the day after a stock market crash is a smart time to buy. 9. Safety first Buffett's investing Rule No. 1 is "Never lose money." No. 2 is "Never forget rule No. 1." He means: Don't take big risks looking for big rewards. Pick sound investments, and hold them long term. That's what made him a billionaire.
NSE:NIFTYEducation
by AshishChauhan_AlgoTrader
6