May 12, 2023

How a new trader decide stop loss and target in intraday trading

 Stop loss is a trading strategy that helps intraday traders limit their losses.  There are various ways to set stop loss for intraday trading:

  • The percentage method. This is pretty straightforward as you only need to decide on what percentage of the stock price you are prepared to give up before exiting your trade. For example, if you buy a stock at Rs. 100 and you are willing to lose 5%, you can set your stop loss at Rs. 95.
  • The support method. This is based on the technical analysis of the support and resistance levels of the stock. Support is the level where the price tends to bounce back from a downward trend, while resistance is the level where the price tends to fall from an upward trend. 
  • The moving average method. This is based on the use of moving averages, which are indicators that show the average price of a stock over a period of time. Moving averages can act as dynamic support and resistance levels, as they change with the price movement.

Apart from setting your stop loss, you should also have a target price for your intraday trade. This is the level where you want to book your profit and exit your position. A common way to calculate your target price is to use the risk-reward ratio, which is the ratio of your potential profit to your potential loss. For example, if you have a risk-reward ratio of 2:1, it means that for every Rs. 1 you risk, you expect to make Rs. 2 in return.

To calculate your target price using the risk-reward ratio, you can use this formula:

  • Target price = Entry price + (Risk-reward ratio x Stop loss amount) for long positions
  • Target price = Entry price - (Risk-reward ratio x Stop loss amount) for short positions

For example, if you buy a stock at Rs. 100, set your stop loss at Rs. 95 and have a risk-reward ratio of 2:1, your target price would be:

  • Target price = 100 + (2 x 5) = Rs. 110

Similarly, if you sell a stock at Rs. 120, set your stop loss at Rs. 125 and have a risk-reward ratio of 2:1, your target price would be:

  • Target price = 120 - (2 x 5) = Rs. 110

Setting your stop loss and target price can help you manage your risk and reward in intraday trading effectively. However, you should also be flexible and adjust your levels according to the market conditions and your trading style

Which segment is better for new trader in Indian stock market?

 There is no definitive answer to which segment is better for a new trader in the Indian stock market, as different segments have different characteristics, risks and rewards. However, some of the factors that may influence your choice are:

  • Your trading style and objectives: Do you want to trade frequently or invest for the long term? Do you want to focus on a specific sector or diversify your portfolio? Do you want to trade with leverage or with your own capital?
  • Your risk appetite and tolerance: How much risk are you willing to take and how much loss can you afford? Do you have a stop-loss strategy and an exit plan? Are you comfortable with volatility and uncertainty?
  • Your knowledge and experience: How familiar are you with the market dynamics, trends and indicators? How well do you understand the fundamentals and technicals of the stocks you want to trade? How much time and effort are you willing to devote to research and analysis?

Some of the best performing sectors in the Indian stock market are:

  • Health and Insurance sector
  • Renewable energy sector
  • IT sector
  • Real estate sector
  • FMCG sector

Ultimately, the best segment for you depends on your personal preferences, goals and capabilities. You should do your own due diligence before making any trading decisions.

May 6, 2023

Which segment is the best to work in the share market.



This is a difficult question to answer, because different segments have different risks and returns. Some of the common segments are:

- Equity: This is where you buy and sell shares of companies and become their owners. You can earn dividends and capital gains from equity, but you also face market fluctuations and volatility.
- Debt: This is where you lend money to companies or governments and earn interest. Debt is less risky than equity, but also offers lower returns. You can invest in bonds, debentures, fixed deposits, etc.
- Mutual Funds: This is where you pool your money with other investors and let a fund manager invest it in various securities. Mutual funds offer diversification and professional management, but also charge fees and expenses. You can choose from different types of mutual funds based on your risk appetite and goals.
- Derivatives: This is where you trade contracts that derive their value from an underlying asset, such as a stock or an index. Derivatives are used for hedging, speculation or arbitrage purposes. They are very risky and complex instruments that require high skills and knowledge.

There is no one best segment for everyone. It depends on your personal preferences, objectives, time horizon and risk tolerance. You should do your own research and analysis before investing in any segment. You should also follow some golden tips for making money from the share market, such as:

- Focus on fundamentals rather than speculation
- Don't get influenced by emotions or herd mentality
- Don't be greedy or fearful
- Be disciplined and realistic
- Diversify your portfolio
- Keep learning and updating yourself

I hope this helps you understand the share market better. If you have any more questions, feel free to ask me.