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The
concept of stop-loss was probably developed at the
beginning of the 19th century. So is it less
effective because it is old? Or is it sacrosanct as all analysts
say the same thing - Don't trade without stop-loss?
The market has changed meanwhile.
From Sensex level of 118-149 in 1980 to 1992
level of 4240 was a jump of 2845%. Then history was created as
for the first time in 130 years of its life, the market went
through a 4 year long bull-run. It took the
Sensex up from 3500 level to almost 22000. A
whopping 600% plus jump.
Even after correction, Sensex is hovering
around 18000-19000 level, much more than 3000 levels of
2002/3.
A simple correction in
Nifty's intraday up-move drives down a Rs
1200 quoted Nifty listed stock by Rs 15-18 or some times even
more.
Traders who use stoploss without really
knowing how to exits at a loss only to find the stock
price moving up much higher later in the day.
No longer the old ideas
and strategies work in the new scheme of
things.
At my training you will know how in my
system, you learn 2 unique method of applying stop loss so that you need not have to wait for a
loss of Rs 5-10 or even Rs 20 in case of higher priced momentum
stocks (normal stop-loss amount applied by novice
traders). This allows you to re-enter a stock as it
recovers with the market. In case of Nifty Futures, the
most you can wait is 12-15 points, exiting a bad trade
within as low as 4-6 points many a times.
My system will give the SELL signal as it had given
BUY
signal. You can exit a trade as soon a sell has been
signaled, perhaps at a slight loss, instead of waiting
to price to decline substantially and hit your normal
stop-loss level. You will see how strongly you can
control loss.
Also see:
BEAR/BULL Levels
BUY/SELL Set-ups
Nifty Future Levels
Reversal Trades
Last Level
Arunangshu M Lahiri is available on mobile nos. 097400-76212
(Bangalore) and 093308-76212 (Kolkata) as well as via
mail:
sharebaba@gmail.com.
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