Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications

How to maximise trading profits?

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 


Eight Nifty stocks hit 52- week lows on Monday. Another eight are within five per cent of their respective lows. Nine stocks in the Junior hit 52week lows as well, along with another six within five per cent of respective lows.

 

A trend- following trader would be looking to short some of these in the stock futures segment. Stock futures are leveraged at roughly 15 per cent, hence a 15 per cent swing will offer 100 per cent gain or loss. The leverage makes stake management very important for derivatives traders.

How does one fine- tune for the ideal contracts?

The best way to start is by eliminating contracts, which could lead to unacceptably high losses. This is like staying out of a poker game where the stakes are too high for comfort.

Any futures trader will lose money about half the time. Making an overall profit involves limiting losses while maximising gains. Stocks have individual levels of volatility and the losses or gains are dependent on that volatility. A stock that swings five per cent on an average day will lead to more gains or losses than a stock that swings two per cent per day.

The market lot tells you what the potential loss or gain is for every rupee change in price. A market lot of 2,000 shares for instance, means a difference of 2,000 for every 1 swing. Another important variable is recent historical volatility.

How much does the stock swing on a daily basis? Many traders use versions of Average True Range ( ATR) calculations, a formula which considers the previous session's closing price, as well the high- low range. Some day traders average the daily high- low range of, say, the past 20 sessions. The ATR is more useful for overnight positions, since stocks often open with a gap but either method is reasonable.

If you are a day- trader, assume you could lose at least half the average daily range multiplied by the market lot. That is, if the average daily range is 8, and the lot is 2,000 shares, you could lose at least 8,000 in a session.

Most trend- followers are not day traders and, therefore, cater to overnight swings. As a rule of thumb, a trend- follower should budget for a possible loss of 1.5 to two times the average daily swing on overnight positions. If this level of loss is unacceptably high, avoid that stock.

You can also use this rule of thumb calculation to equalise stock position sizes in terms of risk. Say, stock A could see a potential loss of 15,000/ session while stock B has a potential loss of 5,000/ session. Then, stock A is three times as volatile as B and, hence, an exposure of three market lots in B will carry the same risk as one lot of A.

Keeping an error margin on such calculations is necessary.

Even if you are extremely disciplined about stop losses, prices can move very fast in either direction and there are no circuit filters for stock futures. However, allowing for error factors, these basic calculations are still helpful in comparing stock positions in terms of possible risk and reward.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

0 comments:



Post a Comment


Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications

Popular Posts

Mutual Fund Application Forms Download Any Applications
Invest in Tax Saving Mutual Funds Invest Online
Infrastructure Bond Application Forms Download Applications