No trading system will be profitable long term without the right risk management :-
In the twenty-first century it has become fashionable to manage one’s own investments, yet few traders implement disciplined, professional money management strategies. During the stock market Dotcom bubble, limiting risk was an afterthought, but after the 2008-2009 meltdown, it showed many investors and traders that it was time to get serious about the management of their money and showed the risk that even conservative investment positions were exposed to. Professional risk and money management strategies are the foundation for success with any trading strategy. Essentially, money management tells you how many shares or contracts to trade on any given position.
For example, money management tells you whether you have enough new money to trade additional positions. Don’t confuse money management with stop placement. Stop placement does not address the how much question. Your stop shows you where the price has to go for you to exit your position but the position sizing aspect of your money management parameters will determine how much you lose if your stop loss is triggered and you exit your trade.
Here are some questions you must answer about your own money management and bet sizing:;
>> How much capital will you place on each trade? What will be your percent of total trading capital on one position?
>> What will be the maximum portfolio heat on your trading? How much could your account go down in one day? How much total risk exposure do you have?
>> Capital preservation versus capital appreciation. How much are you willing to risk in the pursuit of profits?
>> When must you take a loss to avoid larger losses? Your stop loss that results in a small loss is your insurance policy against large losses.
>> If you are on a losing streak do you trade the same? Do you decrease your trade size during losing streaks?
>> How must you prepare if trading both long and short positions? What are your signals for the long or short side?
>> Does a portfolio of long and short allow one to trade more positions? How do they correlate for total risk exposure?
>> How will your trading be adjusted with accumulated new profits? Do you trade bigger positions as your account grows? Will you have a system for withdrawing profits or
will you leave your profits in your account and compound your gains?
>> How is volatility handled? What filters for volatility will you use to adjust your position size and stop losses?
>> How do you prepare yourself psychologically? How will you manage the stress and excitement of trading to maintain your trading discipline?
>> Have you tested your bet sizing? What size of draw down do you expect during a losing streak based on your win percentage and potential losing streak?
>>> Nifty Weekly Chart <<<
>>> Click the chart to see on full screen <<<
Above 10460 - Rally may go on till 10945 and 11330. Many Sectors are breaking out and Other most Upmoved sectors also not showing any negative break down. It means - any consolidation with correction might be an another entry on longer side. Until any major fallout of Geo-Political or Economical factors, Lets travel with Trend.
>>> Nifty Daily Chart <<<
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10460 or the channel may Resist. Else Price may trigger next level of rally till 10620 and 11330.
>>> Nifty Hourly Chart <<<
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Hourly Chart indicates the Important of Support @ 10485, If breaks may given another 100 Points.
>>> Bank Nifty Weekly Chart <<<
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BN if breaks above 25950 may test 26400.
>>> Bank Nifty Daily Chart <<<
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After Recapitalization of PSU Banks - which was showing no sign of recovery - Started moving up. PSU Bank are the backbone of many industries in india. Means a revival to many companies not ruled out. Technical Resistance at 25950 & 26425.
>>> Bank Nifty Hourly Chart <<<
>>> Click the chart to see on full screen <<<
Above is an alternative with bearish scenario. As per, Price must cross above friday high for more rally. Else last upmove shall be for Wave X and correction may start any time.
>>> CNXPSUBank - Daily Chart <<<
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Above 4190 PSU Banks looks more bullish and all PSU bank Stocks may help BN too for a Big or Good Rally.
>>> NIFTY5MIDCAP50 Daily Chart <<<
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After announcement of bharath mala Road project by Govt. Many Infra,Steel,Power and Cement in Midcap Index Showing a Bullish Turnaround. Resistance 5215 looks important for bulls, break above may trigger next round of rally.
>>> BANKINDIA - Daily Chart <<<
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More Rally till 220 & 250 Possible. We have no Open Positions. Just an Info.
>>> CNXPHARMA - Weekly Chart <<<
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Pharma Index on a Major Break out - If happens - Expect a Big Bang move on all Pharma Stocks.
>>> DRREDDY - Hourly Chart <<<
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We are Long and Above 2440 & 2465 - Expect a Fresh Rally.
>>> CNXAUTO -Daily Chart <<<
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Above 11460 - May rally till 11850. Watch all Auto Stocks.
>>> ITC - Hourly Chart - Posted on 31st Nov, 2017 <<<
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Wrote on 31st Nov, We are Long.
>>> ITC - Hourly Chart - Holding Long <<<
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Holding Long still - Above 268 & 270 - More Rally on Card.
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