Position sizing will be in important task during day trading.
Suppose you started trading with Rs. 10,000 , normally broker may give you an exposure up to Rs. 100,00. So you started the trading day. Imagine a situation you decided to buy Infosys share . You will get 27 Infy shares for 1 Lakh. Opposite to your expectation Infy falls down 2% then you will be losing Rs. 2000, ie 20% of original invested capital. This is not good trading strategy.
What Excella says is
Take maximum 5 times exposure instead of 10 times. Divide your exposure with 5 equal parts. In this case you will be able invest Rs. 10,000 each in every calls. Take maximum 3 positions at a time. If your open all your open positions are winning take fourth one , provided you are keeping stop loss for the existing positions.
Money management examples from Excella
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Suppose you started trading with Rs. 10,000 , normally broker may give you an exposure up to Rs. 100,00. So you started the trading day. Imagine a situation you decided to buy Infosys share . You will get 27 Infy shares for 1 Lakh. Opposite to your expectation Infy falls down 2% then you will be losing Rs. 2000, ie 20% of original invested capital. This is not good trading strategy.
What Excella says is
Take maximum 5 times exposure instead of 10 times. Divide your exposure with 5 equal parts. In this case you will be able invest Rs. 10,000 each in every calls. Take maximum 3 positions at a time. If your open all your open positions are winning take fourth one , provided you are keeping stop loss for the existing positions.
Money management examples from Excella
Register Now
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