Hi vv,
i would like ur views on SUVEN LIFE SCIENCES LIMITED
icharts : SUVEN
due to current news i bought 200 @ Rs.113
should i stay in or get out????
i would like ur views on SUVEN LIFE SCIENCES LIMITED
icharts : SUVEN
due to current news i bought 200 @ Rs.113
should i stay in or get out????
This is more of a MIND question rather than a TA question.
Think hard before U get in. Not after!!!.
One of the reason you need to track trades is to specify buy and sell conditions. When you make a buy, write down the reason why you are buying and what will make you sell. Once you hold the position, continue to see whether conditions have changed.
So, I ask you why you bought the stock. If the answer is NEWS, then did that change in the last 2 days. Or is the downturn in the last 2 days has made you fearful of loss. If you get swayed by a tick up or tick down, it will be hard to trade. Do not have emotions for failure or success. One trade will not matter. Even if you make a success in this trade, what guarantee is that you will be positive at the end of the year.
Use the points below in changing how you trade.
1. An outcome of 1 trade does not matter.
2. If you make 40 trades a year, think how your portfolio can be positive after those 40 trades.
U could have 20 loses straight. But, you could also have 5 gains straight that make up 20 loses. What is the point in pondering about 1 trade loss.
Let me give an example. Let say you have 15 gains and 25 loses in an year. Lets use marbles of 2 colors, green and red for this example. Green, win, red a loss. Put these marbles in a bag. Draw each marble out of the bag.
Q) What are the chances of drawing a red or green marble. If the probability of drawing a red marble is more, then did that change the portfolio amount at the end of the year.
Q) Is it possible to draw 10 red marbles out of the bag straight.
Q) Similarly, is it possible to draw 10 green marbles straight.
A) Yes, it is possible, probably both with a lower probability.
The key in this example is, the marbles are constant, the action of drawing (trading) is constant and the risk (stop loss) is constant for either green or red marble. Can we do that with stocks? Stop Loss! yes with position size management. No matter what stock trade we lose, our loss should be constant. Position size should only change. Trading methodology should be constant. Don't trade arbitrarily. If not, results will be skewed.
3. Before you put a trade, assess the loss using Stop. If you can't take the loss, pass the trade. Because, once you put a trade, nobody can determine its outcome.
4. If you can't think in terms of total trades in a year, probably you are trying to gamble. Remember, there is no easy money in stock market. U might have realized this already in the last couple of months.
