Money Management: How to calculate quantity (No. of shares to trade)?
First decide which type of Trader you are And then select Per trade risk :
|Type Of Trader||Risk Per Trade||For account having
capital of 1 Lac
|Low Risk Trader||0.5% of capital||Rs.500|
|Moderate Risk Trader||1% of capital||Rs.1000|
|High Risk Trader||2% of capital||Rs.2000|
Then once you get signal like :
Above : 110
Stop Loss : 108
Target : Will updated…
Quantity (No.of Shares) = Risk per Trade divide by (Buy price minus Stop Loss price)
= Risk Per Trade / (Buy price – Stop Loss price )
Suppose you are moderate risk trader and you are having capital of Rs. 1 Lac then quantity calculation is as follows :
Quantity (No.of Shares) = Risk Per Trade / (Buy price – Stop Loss price )
= 1000 / (110 – 108 )
= 1000 / 2
Quantity (No.of Shares) = 500
Vice Versa for sell signals….
Don’t trade with fixed quantity in each signal…..
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