There's another trading strategy that can help newbies avoid losing big amounts in a very short period. I call it "Compounding your risks"
Here's how it works. You 1st decide the risk you are willing to take per trade. Let's assume that you say that 5% of the capital is all you want to risk for a particular trade. Lets assume your capital is 100,000. So now you would risk only 5,000 in a trade. Say if you want to buy a share priced @ 1000 with a stop loss of 50 rs. So you would buy 5,000 / 50rs. = 100 shares.
If you stop is hit, then your next trade risk would be 5% of 95,000 = 4,750 rs.
This is known as money management, which is a very important aspect of trading. Using this method, you will need to have 13 losing trades in a row to get your equity to 51,334. Assuming if you do have 13 losing trades in a row, that's a clear message that trading is not meant for you. You can also lower your risk, by risking only 2% instead of 5%. Using a 2% risk model strategy, your equity will be cut to half if you have 34 losing trades in a row.
Jai Shewaramani