Before entering in the world of ASK & BID you must understand your own personality. You should understand that what kind of trader you are . Every person has their own limitation according to which one would trade in market. Trader has to make sure that his personality must not coincide with his trading activity.
One must not
1) Impatience
2) Anxiety
3) Biased
4) Don’t ask for more
5) Don’t do much analysis
One must always
1) Stick to your plan
2) Know your support & resistance
3) Respect your stop loss
4) Keep it as simple as possible
5) Always be a learner
There are two society in share market
1) Trading Society
2) Investing Society
Please do join our Telegram Channel for more like this
https://t.me/gyaneee
In trading society people trade for quick money where as in investing society people invest in particular stock with their research to create wealth in long term. But I think differently , I admire the patience level of investor and their working but at the same time I think about our ERA which recommends smart working over hardworking . Most of the wealth makers say wealth can be created through investing only , I agree with this but partially & I deny the half of it with the help of Price Action.
To elaborate my thinking would like to give you an example in which I traded and booked profit multiple times.
Understand this chart above , It's ABFRL From March'20 to almost March'21 . I have pinned highs and lows in the chart same is being written below for understanding.
P1- 100.29 P2- 141.65
P3- 113.52 P4- 153.89
P5- 129.05 P6- 169.44
P7- 142.00 P8- 189.62
P9- 152.23 P10-223.70
I forgot to take exact price on chart for p7 point so considered near 142 . So what I want to demonstrate here is working of trader and investor and later on I would like to tell what I did with this stock whole year.
Firstly we will calculate investor's profit which is very simple in this case ( upto the CMP )
Investor bought the stock at P1 rate - Rs 100.29
He is having it right now - Rs 223.70
He earned - 123.41 Rs till now on one share.
His profit is 123%.
Now Smart Trader ( Smart is because , one who is following chart and indicator and following this stock )
This Smart Trader
Bought at P1 & Sold at P2 - Profit Earned - 41.36 Rs - 41.24 %
Bought at P3 & Sold at P4 - Profit Earned - 40.37 Rs - 35.56 %
Bought at P5 & Sold at P6 - Profit Earned - 40.39 Rs - 31.29 %
Bought at P7 & Sold at P8 - Profit Earned - 47.62 Rs - 33.53 %
Bought at P9 & Sold at P10 - Profit Earned - 71.47 Rs - 46.94 %
He earned small but regularly and his cumulative profit for one share would be 241.21 Rs and his cumulative profit in percentages would be 188.58% .
In terms of Earning on each share , Smart Trader earned 95% more than Investor. I understand that no one can entry on correct price and no one can exit on correct price but the difference would not bring 95% to 0% it would bring 5-10% down , but that too would be way higher from investor's wealth.
Now here's what I did , I worked out both method simultaneously , I bought 100 shares of ABFRL near 125 (when I found this stock this was trading at 125 ) . Every time the stock made a high and touched trend line , I used to sell 50 shares and book profit and kept 50 for longer period , as if it would've crossed the trend line it would be called breakout and large portion of volume would have entered it , if it failed to cross the trend line , it would have come down to find the support as it is visible in chart.
Once I booked 50 share in first milestone , stock came down and in every 10-15% drop I used to buy 10-20 shares and I followed it till breakout and on breakout I sold only 25%. I Played both game with the help of followings
1) Patience - Sticked to Plan
2) Working ( Analysis ) - Know Your Support & Resistance
3) News Reading - Always be a learner
4) Booking Partial Profit - Keep as simple as possible
Do Join our Facebook Channel
https://t.me/gyaneee
No comments:
Post a Comment