How we decide the target price for stock

[saivenkat]

In general, there is no target price of a stock. Its all about the mind set, and trading psychology of a person.
For example, If i buy a stock "X" at price 10, and if a target price exists,say 20, then naturally every one will try to exit from the stock at price 20, so only sellers will be there..no buyers for the stock.

 

[jaipuriarji]

Hi,

To be honest with you the intraday price targets are just to make investors believe that the analysts are doing some very complex calculations and arriving at a price (Target price and stop loss). In my investing carrier I have experienced that the success rate is even less than 2% if you take a period of 1-2 years. In majority of the cases the Stop loss is triggered and people like us gets demotivated by the loss.

The general trend is definitely there through which you can predict the direction of movement with a high degree of certanity, but predicting everyday price movement with even 10% success rate is next to impossible.

Stop loss is kept by these analysts to save their ass in case there is a crash in stocks or markets. Even Rakesh Jhunjhunwala has advised not to trade daily.

The only way to make money consistently is through value investing where you buy what you know and hold it till the value is realized by other participants in the market.


Regards
Amit Agarwal
-------------------
BEN GRAHAM SCHOOL OF FINANCE

Hi Mr Amit Agarwal
I agree with what you have said.Your words about value investing are very true and every new investor should keep those in mind.Performance,balance sheets,ability to meet the challenges that different adverse situations offer, comitted management and workforce etc. are the things in any organisation which need to be valued above everything else.

 

[oilman5]

Trading occurs actually in fluid state.So many variables exist........including observer.
So we develop a concept
Target........to define some expected price.......in defined timeframe.......day,week,month,year..........All this target has ifs and buts.Unfortunately most used target.........r by snakeoil vendor.......newsletter writers........both fundamental & technical writers......who earn by writing /create hype NOT by trading.
..................
hope it clarifies

 

[omkothari]

how do i decide the stoploss if the buying price and the target is clear. Will somebody pl guide me

 

[Capricorn]

how do i decide the stoploss if the buying price and the target is clear. Will somebody pl guide me

Target is normally a derivative of stop loss and not the other way around.

A R/R of 1:1.5-2 is generally sufficient for short term traders, without going into technicals.

 

[crystalarun]

what I usually do is keep 1-3% looking on the trend... then I put a trigger and stop loss. I will explain with example. On Friday 5th aug, I saw HCL tech coming down. I waited and bought 200 shares at 428, it went down to 427, my target was 432 it went to 436 and i put a stop loss at 432, it went 437, i increased my stop loss to 433... kept on going till 441.. my stop loss was 438... and finally it it was sold at 438. I just trail behind with a stop loss. Thats how I make it work for me.. lets hope it works for you too... good luck and happy trading