Its effective price. I dont have a fairy god mother who granted me a special price...:lol:
say u short at 4900 and then reverse the trade to long at 4800 and carry it for the next day, your effective price is last price long minus the profit u got by jobbing. i.e. u got a profit of 100 points from the short, u minus that from the price u went long, so your effective price of the long is 4700...
say u short at 4900 and then reverse the trade to long at 4800 and carry it for the next day, your effective price is last price long minus the profit u got by jobbing. i.e. u got a profit of 100 points from the short, u minus that from the price u went long, so your effective price of the long is 4700...
Why do we have to count 100 rs of profit from previous +ive trade ? Are these 2 trades interdependent or statistically they are mutually independent events ? Do you also carry forward losses of previous trade in next trade ?
In above scenario, What if market goes back to 4750.. the trade will still look like you are in profit.. but actually, u have given back the profit that market gave you ?
I think, handling this issue is lot more to do with your belief about Your Deposited Trading Capital v/s Money given by market as profit. Do you see them with the same or different coloured glass.
Maybe you would like to address this when looking into psychological aspect of trading.
All the best and happy trading.