Entry & Exit
Things to follow while entering a
trade:
No random entries:
Your entry & exit price cannot happen as per your convenience. It is a moving
train, which you need to catch at the right time. Always wait for right entry
pattern i.e. price action.
Know your exits before entry:
You should know your stop loss & targets before executing a trade.
Respect Stop loss:
Do not switch SL or average your position when price comes close to hit your
sl.
If your sl is hitting then it clearly means that your trade is wrong. Averaging
or adjusting sl doesn’t make it right.
Entry Patterns:
Long Short
Gap Up Bullish Gap Down Bearish
Gap Down Bullish Gap Up Bearish
Base Violation Base Violation
Long Entry Patterns
Gap Up Bullish/’N’ Pattern
Gap Down Bullish
Bullish Base Violation
Short Entry Patterns
Gap Down Bearish/Reverse ‘N’
Pattern
Gap Up Bearish
Bearish Base Violation
RISK MANAGEMENT
The Holy Grail of Trading
Definition:
In the world of finance, risk management refers to the practice of
identifying potential risks in advance, analyzing them and taking
precautionary steps to reduce the risk.
In simple words Risk Management means MANAGING/CONTROLLING
POSITION SIZING.
RISK MANAGEMENT
The Holy Grail of Trading
Aggressive Intraday Compounding-
It means adding the profits from your first
trade to the next one.
I.e. If you earned 1,000/- from your first
trade with 1:1 ratio, then on next trade
you’ll be trading with the risk of 2,000/- (1000 from capital risk + 1000
from last
profit). This way even if your SL is hit, you’ll be losing only 1,000/- from
initial
capital. But if your trade goes in your favor, you’ll get a reward of 2,000/-
on the
risk of 1,000/- only. So your R:R automatically turns into 1:2.
TRADE MANAGEMENT
Trade Management is the process which starts after entering the
trade. Starting from trailing your profits to closing the complete trade.
3 Points System:
Booking complete profits at pre defined targets.
Booking partial profits at fixed R:R e.g. 1:1 or 1:2
Trailing rest quantity until trailing sl hits.
