New Intermed Uptrend!!

[ragh_ash]

Nice "Cup-n-Handle formation"on the SHIPPING CORP monthly..........aggressive position traders can take a half here and the rest on a breakout above 189.Share size accordingly.....stop of 130,target of 280.

Certain degree of risk here..........so careful.Half positions,share size as per your Trading Plan,and take your stops if hit.

Happy Trading!!

Saint

hi saint,
excuse me for asking some elementary.
what u mean by
1) share size accordingly.
2) reward to risk ratio
3) breakout (is 189 in above is absolute or is it give or take a few points here or there) this question b'coz some time back got bashed for buying maars at 7.3
4) how do u calculate/predict a pull back. i mean u go to previous support?

u see v basic questions
but what 2 do more i try to see patterns more basic questions come up.
and pray pl explain cup & handle for SC.
i know u had explained a few posts earlier but still i am not getting it.
regards

 

[Saint]

hi saint,
excuse me for asking some elementary.
what u mean by
1) share size accordingly.
2) reward to risk ratio
3) breakout (is 189 in above is absolute or is it give or take a few points here or there) this question b'coz some time back got bashed for buying maars at 7.3
4) how do u calculate/predict a pull back. i mean u go to previous support?

u see v basic questions
but what 2 do more i try to see patterns more basic questions come up.
and pray pl explain cup & handle for SC.
i know u had explained a few posts earlier but still i am not getting it.
regards

Hi Ragh_Ash,

No question is ever elementary.........I am glad that you ask so many questions and have that burning desire to learn.Great stuff,my friend!!Ask,ask,ask......always ask what you did not understand.Always glad to explain or re-explain....some times it may take some time in coming,but always glad to explain.

Going to answer your questions one by one..........let 's start with this one

what u mean by
1) share size accordingly.

Just check out something I had posted earlier...........any questions get back to me.Always glad to help!

Hi Avinash,

Share sizing is an art form .....Understanding it gives you great power and great profits.Also the stop loss when triggerred does not affect you in the least.One just moves on to get another stock and make profits there.

Let us for example use ISPAT INDS.I caught this move from November last year so it's easy to quote this as an example.

STEP 1:First,I should know the capital that I have.Let us presume it is 10 lakhs that I am playing with.How much am I willing to risk per trade?Anywhere bet 0.5%-2%.Let us say that I am willing to risk only 1% per trade.Therefore what is my risk per trade?Ans:1/100 times 10L=Rs10,000/-

STEP 2:Next we go to our charts.Entered on November 3rd at 13 with a stop loss of 11.So we got our ENTRY and STOP LOSS.

STEP 3:Now is this trade worth it?Therefore we calculate the reward to risk.The ratio should be greater than 2:1.Our target is 20.That gives us a 3.5:1 reward to risk.

So this trade is worth taking,We have a great entry point,a stop loss and a target.The reward to risk is worth it.But how many shares?

STEP 4:A s we calculated just now,for a capital of 10lakhs,we are risking only Rs10,000 for this trade.Meaning if the stop loss is hit,we lose Rs10,000.So how many shares do we buy?Ans:10,000 divided by the dist from entry to stop loss=10,000 divided by(13-11)=5000.

So we buy 5000 share of ISPAT at 13 with a stop loss of 11 and a provisional target of 20,with a reward to risk of 3.5:1.

Once a perfect entry,stop loss and share size is looked into,the trade is now on auto-gear.Then we trail stop it upwards till target or till taken out.

Hope I have helped answer your doubt.

Happy Trading!!
Saint

More Later!!
Saint

 

[sureshib]

Kindly Have Your Views About Spic And Centurian Bank In The Long Run


Regards

Sureshib

 

[sureshib]

Kindly Have The Minimum Requirements To Start The Share Trading Business Through Internet Online And Where To Contact For Help?

Regards,
Sureshib

 

[sureshib]

Kindly Have The Minimum Requirements To Start The Share Trading Business Through Internet Online And Where To Contact For Help?

Regards,
Sureshib

 

[Saint]

2) reward to risk ratio

Hi Ragh Ash,

RISK is nothing but the amount of money that you could lose in any particular trade.

REWARD is nothing but the amount you stand to make if the trade goes as per plan.

RISK-REWARD RATIO is nothing but the amount of money you could lose as compared to the money you could make.
RISK-REWARD RATIO has to be better than 1:2 or greater ,in position and swing trades.In day trades,R:REW=1:1 at least.

Therefore in that ISPAT INDS example,the stop loss is at 11.The entry is at 13.The target is at 20.Therefore,the RISK=Rs2,and the REWARD=Rs 7,therefore the risk reward ratio=2:7=1:3.5(greater than 2 ,so the trade is worth a shot).

Measuring Risk and Reward is important before putting in atrade,so that we can assess if the risk in putting our money on the line is worth it or not.

Happy Trading!
Saint

 

[Saint]

3) breakout (is 189 in above is absolute or is it give or take a few points here or there) this question b'coz some time back got bashed for buying maars at 7.3

Hi Ragh-Ash,

I understand the doubt.........when I say buy a particular stock if it crosses 189,it means buy at 189.4,189.8,190,192........but of course,not 250 and 350 for sure......

And my friend,....not a bashing,just a tap on your wrist........only out of concern.

Saint

 

[karthikmarar]

Saint

very nicely explained in such simple terms...great work, my friend...Ever thought of writing a book..."Trading and Technical Analysis for Beginners"...? I will take the publishing rights...and I can plan my early retirement... ....and a nice cozy house on the backwaters of kerala...

warm regards

karthik

 

[ragh_ash]

Hi Ragh-Ash,

I understand the doubt.........when I say buy a particular stock if it crosses 189,it means buy at 189.4,189.8,190,192........but of course,not 250 and 350 for sure......

And my friend,....not a bashing,just a tap on your wrist........only out of concern.

Saint

thx saint,
am still waiting 4 full reply
but this is great stuff(u must have heard this n number of times) but really pal u r attitude is something i am trying to imbibe. patient, sharing all that

 

[Saint]

Saint
The kind of appreciation that you've got in these threads forces me to ask a couple of queries regarding some stocks. Hope you don't mind this trouble.

> IFCI - what is you view on this stock.
> Reliance Capital - Is it expected to remain rangebound for sometime.

I am also very keen to know whether you track the wonderful commodity markets.

Million Thanks
Cheers

Hi Commerciante Inde,

Will come to your queries a bit later..............as for the commodity markets,don't know much about it.But still track the Gold market........am no expert in the Gold Futures,but have a number of Gold stocks with me (trading in the nyse).Piled on to physical gold at 303 when monthly charts started making a double bottom and moving into a new uptrend and silver at 5,when charts started following gold up....and so far enjoying the ride up.Well other than Gold and Silver,don't usually track the Grains ,etc.

REL CAP:In a very strong primary uptrend........taking a breather right now as its monthly charts have started to correct.Still some way to go for the correction.......consolidating via price or time.Looks good especially if this area of 365-370 holds as support........If in already,and you're along term player,it's HOLD.

IFCI:This has been in a long downtrend from 1998 and found a bottom in 2001-2002.2003 has seen IFCI threatening to start a new uptrend......so far a nice higher pivot low on the monthly and looking good for higher prices if you are a long term player.Amonthly close over 20 is confirmation of anew uptrend.........looking good,is a HOLD if in already.

Happy Trading!!
Saint