{"id":2047,"date":"2010-01-23T14:52:56","date_gmt":"2010-01-23T09:22:56","guid":{"rendered":"http:\/\/www.niftylivecharts.com\/blog\/?p=2047"},"modified":"2010-01-23T14:52:56","modified_gmt":"2010-01-23T09:22:56","slug":"basic-principles-of-short-term-trading","status":"publish","type":"post","link":"https:\/\/www.niftylivecharts.com\/blog\/basic-principles-of-short-term-trading\/","title":{"rendered":"Basic Principles of Short-term Trading"},"content":{"rendered":"\n\n\n
<\/td>\nThe first principle is to do few trades. At any point, one should not have more than 6 trades outstanding. A good number is 3-5.<\/td>\n<\/tr>\n

<\/tbody>\n<\/table>\n<\/p>\n\n\n
Equal capital allocation<\/strong>: Divide your short term trading capital equally into each trade. Ideally if one has Rs 1 lac of capital, one should put around Rs 20,000 in each trade.<\/td>\n<\/tr>\n

<\/tbody>\n<\/table>\n<\/p>\n\n\n
<\/td>\nClear Targets and profit booking<\/strong>: While entering a trade, one should be clear about the target price he expects to achieve. Once the target is reached, profits should be booked promptly. Here, some traders often fall to the greed-syndrome and hold on for more profits. This, more often than not, leads to losses in the long run.<\/td>\n<\/tr>\n

<\/tbody>\n<\/table>\n<\/p>\n\n\n
Strict stoplosses<\/strong>: No strategy, however good, can ensure 100% success. A strategy that yields above 65% success rate is reasonably good.<\/td>\n<\/tr>\n

<\/tbody>\n<\/table>\n

But there is a catch here! 65% success means you achieve your targets in 2 out of every 3 trades. But how much do you lose in the third? This is what determines your overall profitability.<\/p>\n

In a nutshell<\/strong><\/p>\n

Short-term trading has its advantages when compared with day-trading and long-term investment. It is suited for both full-time and part-time traders. When performed in accordance with the basic principles, it can be an engrossing and potentially lucrative activity\/profession.<\/p>\n","protected":false},"excerpt":{"rendered":"

The first principle is to do few trades. At any point, one should not have more than 6 trades outstanding. A good number is 3-5. Equal capital allocation: Divide your short term trading capital equally into each trade. Ideally if one has Rs 1 lac of capital, one should put around Rs 20,000 in each […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[5685,5686,5684],"class_list":["post-2047","post","type-post","status-publish","format-standard","category-general","tag-basic-principes-of-trading","tag-principles-of-short-term-trading","tag-short-term-trading","entry"],"_links":{"self":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/2047","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/comments?post=2047"}],"version-history":[{"count":0,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/2047\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/media?parent=2047"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/categories?post=2047"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/tags?post=2047"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}