Embedded Files
Step 0 - Basic knowledge
Step 0 - Basic knowledge
What is stock market?
What is stock market?
Step 1 - Requirement
Step 1 - Requirement
We need a trading/D-mat account to trade in stocks.
We need a trading/D-mat account to trade in stocks.
- Stock Selection
- It involves a process of creating universe with similar characteristics so that we can increase the probability of our trading strategy.
- Stock selection might involve - volatility, volume, delivery, gapup/down, liquidity, mcap, fundamentals, news, certain theme based on macro trend
2. Strategy for that stock (when to enter + when to exit)
- It also involves time-period selection(holding period)
- It involves finding best indicators or methodology by which we can make entry and exit decision
2. Strategy for that stock (when to enter + when to exit)
- It also involves time-period selection(holding period)
- It involves finding best indicators or methodology by which we can make entry and exit decision
3. Backtesting for strategy to calculate winning percentage
- Backtesting helps us to calculate winning percentage
- Drawdown
- No. of consecutive times trades could go wrong.
- Type of market environment strategy behave best or poorly
- It helps us find out ideal holding time for stock if target is not reached
- It helps us modify our entry and exit criterion.
3. Backtesting for strategy to calculate winning percentage
- Backtesting helps us to calculate winning percentage
- Drawdown
- No. of consecutive times trades could go wrong.
- Type of market environment strategy behave best or poorly
- It helps us find out ideal holding time for stock if target is not reached
- It helps us modify our entry and exit criterion.
4. Modifying strategy at step 2 if backtesting at step 3 is not satisfactory
4. Modifying strategy at step 2 if backtesting at step 3 is not satisfactory
- Calculate Stop-loss and target[or Reward to risk ratio]
2. If R/R ratio is more than we required for our % winning probability for the strategy.
2. If R/R ratio is more than we required for our % winning probability for the strategy.
3. Position sizing[what % of our trading account we should risk]
3. Position sizing[what % of our trading account we should risk]
4. Lastly, when to add more money if we are a successful trader [this also comes under trading risk management]
4. Lastly, when to add more money if we are a successful trader [this also comes under trading risk management]
Step3- After Trading
Step3- After Trading
- Making a trading journal.
2. Weakly/monthly/quarterly analysis of your trades
2. Weakly/monthly/quarterly analysis of your trades
Page updated
Google Sites
Report abuse