*Spatch
Why do you say that about under capitalized account?? Is it because their risk taking capacity is small, but can't it be overcome by risking a small %age of the capital per trade?
Not really to do with Risk Capacity.
The reason traders should be properly capitalized is that it allows you room to make errors and still survive for another battle.
Imagine, you fighting it out with Traders who have 20Lacs at their disposal and you having 2Lacs (just a example). Assume both of you loose 1Lac in a week. Its 50% drainage for you. For the other trader its 5%. We all know, that you will have ups and downs in trading. Such losses will disturb you mentally and subsequently impair your trading judgement as you will now have less ammo to fight with. You will now start thinking about how to recoup the losses (instead of thinking of trading right). Whereas the other guy will simply focus and wait for his next trade and execute right.
so tentatively I try to get about 1% of return daily, if I see that happening I exit the trade.
For a change, try to see if you can shift your thinking from % returns. Dont ask Market to give you % returns. It Wont. It does what it wants to. Rather, based on your study of financial instrument you can have a exit on a fixed amount ex; Utilize Average True Range (ATR) to determine the average range movement in a day for a instrument. That will help give you some perspective in your exits. So for example: The ATR of Nifty for last 10 days is says 30 points, you can then maybe keep exit of 15 points after you have entered a nifty buy. Again this is not how i trade, but just trying to get your mind rolling in different ways in which you can exit. Or like me, exit, near a known S/R zone.
... I am unable to ride the whole trend.
....In my case I am cutting both the profits and the losses, which is not good.
No one does ride the whole trend. If ever in you life you do master this, contact any of the hedgefund houses. They will give you 10 digit pay check to work for them.
Even I try to employ s/r levels, but the thing is there are so many ways one cay figure out the S/R (SMA, EMA, Price levels etc...) that sometimes I get confused...
Oh, my Favorite topic. First, S/R is what S/R means. Level where the demand-supply ratio had changed previously. Its an absolute value and not a average. So, a S/R level for me is where the price changed the direction. Consider those as area where you feel people are most likely to keep their pending orders. Again, i do utilize S/R for my exits, but i also look for price action to justify my exits. So for example, once price reaches near my S/R zone and if i see price action stalling or showing weakness, i bail out. The reason i wait for price action is that , many a times, the strong hands will cross the S/R zones to induce the naive traders only to come back within the zone. This simply gives me a bit more money in my pocket.
One question I'd like to ask people who have succeeded is that what are your strategies to find the stocks to invest in.
Good point. Im a day trader and typically trade in fixed instrument , like some 8 stocks and Nifty. This are liquid stocks. I have decided to concentrate on only some liquid stocks and Nifty as this allows me to understand the behavior of this stocks , which helps me in the price action strategy that i utilize.
As for "Investing", i really dont know how do they filter the candidates. Some do NEWS based , some utilize Volume gainers while some utilize 52 weeks H/L candidates. BUT, im not sure. Maybe some can answer.
Hope i made some sense in my post.
