the risk of not taking risk

as they say
not taking risk
is the biggest risk!

u r saying no to the opportunity?

thereafter u can't complain that u didn't get the opportunity!!!

u got one (rather u get many)
but the trouble is
that u want opportunities
without risk.

stock market it not a restaurent
where u can order for boneless fish or chicken.

there is nothing called risk-less opportunity.

risk and opportunity are inseparable.

in reverse all this means is
that wherever there is risk
there has to be an opportunity!!!

further,
it is only one small thing that you decide to take risk.

what's most important is

a) when to take the risk

b) and how much.

take risk at the edge of a pattern

and take that much beyond which the pattern which formed the basis of the trade, nomore holds

true!

there are only two ways a price can go
- either up or down

there is no third way.
so, you already have 50% chance of winning under your belt
now all you need to do
is to find ways to increase that probability!


(niftyshots.blogspot)

self talk

i generally try to take and share trades with stoploss of 10-15 points.
like the last one where the stoploss is just 11 points away.
if one trades in nifty futures and trades with 1 lot (say), then the max risk in a 11 point SL is of 550 rupees. add another 150 rupees as brokerage (majority brokers charge less), this adds up to 700 rupees.
if the trade goes in the desired direction and gives a profit of 30 (say) points, the benefit amounts to 30x50=1500 rupees. minus brokerage of 150, it comes to 1350 rupees.
if one trades with mini-nifty, all this gets reduced proporationately.
if one can't take this much of risk with this much of potential for profit, one should not consider taking up trading. instead he or she can opt for occasionally buying lottery ticket.
otherwise, it can be a pretty decent self-employment.

only 3 conditions : a) i am assuming that the trader has got basic trading skills, b) he ruthlessly and strictly uses stop loss preferably using bid option, so that no time is wasted if SL is hit, c) re-enter the trade if price crosses back the SL (preferably in the same session).

the only game spoiler can be = a sudden sharp move that jumps the stop loss bid range.

this may happen occasionally. this is stock market - a semi-war zone!
this is why it is so important that we lose small and profit max possible - to build a buffer for such occasions.
trading is simple but not simplistic! 


(niftyshots.blogspot.com)

no gains, without (the right type of) pains

risk can't be separated from trading.
a trader must accept this fact.
once you accept this, it will be prudent to understand that there are four choices of trading risk you can take
1. small risk taken, small gain booked
2. small risk taken, maximum gain booked
3. large risk allowed, small gain booked
4. large risk allowed, large gain expected.
while type 4 risk remains a dream, rather a nightmare,
type 3 risk is what amateurs do on the way to becoming pro's (provided they survive)
type 2 risk taker is a pro
and type 1 risk is the sign of a maturing amateur.

(niftyshots.blogspot.com)

accepting risk

trading is risky.

so, all traders, by that definition, can claim to have taken risk.

but there is difference between

'taking' risk

and 'accepting' risk.

if you 'take' risk without 'accepting' what all can come with it

you are fake

and destined to be knocked out

by market forces.

but, on the contrary

if you enter a trade

while 'accepting' the risk and hence the likelihoods

you can withstand the market stress

and survive its bluffs.

secret of making big money in trading

in stock market
i have realized one precious thing...
if you know a secret to make money **
and if you don't use it
it is almost as good as
not knowing that secret!

and if you know "a secret"
the trade will still be risky
but you've got to take that risk!

that mountain of emotions has to be crossed over!!

i repeat
that mountain of emotions has to be crossed over!!

but on the other hand
if you don't have "a secret"
better not take any risk at all
till such time that you have one
tried and tested...

even surety is risky!
(who knows what it will bring?)
but risky surety is better that risky uncertainty!

now the question is
if you know "a secret"
how much should one risk?

well,
you should risk
what you can afford to lose!

going a few steps forward -

- manage the risk
- try to hedge the risk
- and keep backup plan ready!

those who don't take risk
remain standing...

those who take blind risk
sink...







**(pl note that i said "a secret" and not "the secret"
- as i believe that there are more than one secrets or ways
to take money out of the stock market)

not a joke any more!

"why do traders miss the train every time???"

"because they can't afford to lose stop loss amount!"

importance of risk (words from masters)

"the instinct for avoiding unnecessary risk

can be very powerful.

this is a trait that ensures survival under conditions of danger and uncertainty.

but in trading, avoiding risk will prevent you from becoming a good trader, let alone a master.

traders trade in risk; it’s that simple.

master traders view risk as an important and necessary ingredient in any potential trade.

they know that the very best trades are often

the ones that are hardest for most people to make because of the perceived high risk.

the very fact that a trade is difficult to initiate

makes it less likely that others will also make that particular trade.

the lack of a large number of traders taking a similar position

makes it much easier to make money during the subsequent price movement."

- Curtis Faith

best stocks for investing and trading

for investing

large caps are dangerous = many will not be the tops in next 5-10 years and slump

mid caps are the least dangerous = many are likely to become large caps in next 5-10 years

small caps are the most dangerous = many are likely to vanish in next 5-10 years

--

for trading

mid caps are dangerous = these can fluctuate a lot even in short term

large caps are the least dangerous = they are least likely to fluctuate big in short term. if they do, they are likely to recover if fundamentals are intact.

small caps are most dangerous = these can fluctuate wildly including in circuit locks

--

caution : only companies with decent corporate governance are being talked here. rest are not worthy of touching except when gambling is acceptable!