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Hello dear readers,
Our today’s topic of discussion is about lot size.
Most of the novice traders get attracted towards large profit screenshots without realizing the high volume used to make that profit. We are only looking at the gain and feel high about the trader. The problem lies in not understanding the risk associated in intraday trading. If the profit amount is that high in intraday using multiple lot size, chances are very high that that trader also bore an equal amount of risk. You might go to cloud 9 getting that profit but tat the same time might faint as well if your sl does get hit. Always ask yourself if you are comfortable with the loss trading with that high volume. While trading intraday keep in mind you may be in right trade, but if your stop-loss is not perfect it will hit multiple times, and despite in good trade ultimately you will lose heavy money. So be careful in placing stop-loss always. When you will trade in high volumes remember risk is always accounted in that say you are trading 10 scripts each 2 lots total 20 lots. Now if a drawdown of 6000 Rs per lot then you will see an m2m loss of 1.2 lacs.
At that time your brain will give you signal exit the trade and book loss.
Also it is quite often we cant take decision’s.
Kindly refer our previous post.
Therefore, you should play with only that many lots with which you are comfortable. Limit your loss always be your first and foremost priority in trading. Rest, you will be there to survive and grow. Always remember, slow and steady wins the race. One day’s excitement should not eat your lifelong efforts and handwork.
Best of luck
Regards,
StockTradingF&OTeam