conversation

Rotation of funds and position :

When scrips run very much far from the bottom in bullish trend and when  trader sell off his entire long holdings, it becomes very difficult for him to enter into long trade at higher level and many a times in case of bullish trend, he fails to keep and perform strict stop loss in case of positional trading and as a result he stucks at the higher lever.

If he decides to exit at the declined price he has to suffer a huge loss, but if he watches the price movement carefully and if his financial availability permits, he can trade at the lower level price chennal and come out of the losses.

The above table clarifies the situation.
If buy rate is 8200 and stuck due to non-performance of stop loss, he can go on adding new position at lower rate. Means he adds trade -2 and exit when price reaches near to the price of trade 1, not exactly at trade 1 price, but before that. If not reach at the price of trade - 1, he should again add one more long position, and try to exit near to the price of trade -2. Similarly he should go on rotating his funds and additional position taken at each stage. In this case his profit for the additional position remains mostly fixed, but keeps his funds released and he earns at the lower price channel and there by come out of the would be loss.

Here one must have enough financial availability and must go on rotating his funds and position without any greed. His main intention is to recover loss step by step in the trades taken subsequently.
The above table clarifies the requirement of funds and assuming that new position is taken at each 50 points movements. Two side arrow  symbol below buy rate suggest the rotating of the position on both side as per the movement.

The above system is not favoring averaging, but it insists to trade at lower price movement channel, when one is stuck at the higher level. It is the rotation of the funds and position.

As shown in the above table, the first position is for only one lot even though the trade has 2 lakhs. If he invests entire his funds for more positions, he may require more funds to add more positions at the lower level and when he fails to make provision for larger funds, he has to exit the positions in loss due to lack of funds. Hence this system requires utmost discipline in positioning, entering and exiting at right level.

Following table clarifies the financial requirement for price movement of 100 points decline at each stage.

convesation

mahesh karnani (10/4/2013 9:13:16 AM): gm sir
mahesh karnani (10/4/2013 9:13:20 AM): how r u ??
gauresh59 (10/4/2013 11:56:14 AM): yes..........
gauresh59 (10/4/2013 11:56:18 AM): i am fine
BUZZ!!!
mahesh karnani (10/4/2013 12:37:18 PM): yes sir
mahesh karnani (10/4/2013 12:38:00 PM): i hv lost big money , so was out of market for many days
gauresh59 (10/4/2013 12:38:21 PM): how ?
gauresh59 (10/4/2013 12:38:32 PM): must have over traded or must not have kept sl
mahesh karnani (10/4/2013 12:38:55 PM): was holding lots of punj lyold , sintex , hdil in futures
mahesh karnani (10/4/2013 12:39:15 PM): plz suggest me something
gauresh59 (10/4/2013 12:39:23 PM): but you should trade as per levels and exit your trade
gauresh59 (10/4/2013 12:39:34 PM): how much loss incurred ?
mahesh karnani (10/4/2013 12:39:37 PM): plz guide me sir
mahesh karnani (10/4/2013 12:39:46 PM): 12 lakhs rupees
gauresh59 (10/4/2013 12:39:50 PM): now how much remained ?
mahesh karnani (10/4/2013 12:40:10 PM): just 50k is with me now
gauresh59 (10/4/2013 12:41:32 PM): dear in stock market how can one earn with such a low capital ?
gauresh59 (10/4/2013 12:41:51 PM): even nf one lot trading requires 35 k + M2M money
mahesh karnani (10/4/2013 12:42:10 PM): i will trade in 1 lot onlyy
mahesh karnani (10/4/2013 12:42:30 PM): also in options
gauresh59 (10/4/2013 12:42:36 PM): not possible at all
gauresh59 (10/4/2013 12:42:45 PM): option trading is much more risky ......
mahesh karnani (10/4/2013 12:43:01 PM): u r right sir
gauresh59 (10/4/2013 12:43:06 PM): i cannot understand .....why you have done such a great mistake ....
mahesh karnani (10/4/2013 12:43:22 PM): over confidence sir
gauresh59 (10/4/2013 12:43:42 PM): i think you have habit to trade as a gambler and this time you must have traded heavyly......
mahesh karnani (10/4/2013 12:43:44 PM): i was the same guy who made lakhs in relcap in a single day
gauresh59 (10/4/2013 12:43:49 PM): without any sl....
gauresh59 (10/4/2013 12:44:00 PM): yes i know....
mahesh karnani (10/4/2013 12:44:07 PM): u cn say anything sir
mahesh karnani (10/4/2013 12:44:12 PM): i will agree
gauresh59 (10/4/2013 12:44:15 PM): but we must trade with discipline ....
mahesh karnani (10/4/2013 12:44:28 PM): cn u guide me now
gauresh59 (10/4/2013 12:44:36 PM): even i never trade scrips of large size and if trade i keep small sl ....
mahesh karnani (10/4/2013 12:44:50 PM): okk
gauresh59 (10/4/2013 12:45:21 PM): as per me, i should have atleast capacity to trade for 2 lots and that is positionally ..........as per sar system...then it is possible....
gauresh59 (10/4/2013 12:45:36 PM): and the trade must be with discipline ......as per the levels ......
mahesh karnani (10/4/2013 12:45:40 PM): i cn bring more 50 k
mahesh karnani (10/4/2013 12:45:45 PM): is that okk
gauresh59 (10/4/2013 12:46:17 PM): only positional trading can give money ...though it takes more time......but it is a sure .....
mahesh karnani (10/4/2013 12:46:38 PM): okk the guide me positionally
mahesh karnani (10/4/2013 12:46:45 PM): bt i m in great need
gauresh59 (10/4/2013 12:46:53 PM): sar trading is to protect employed capital rather than earning .......and if you have capital then only you can earn ......
mahesh karnani (10/4/2013 12:47:10 PM): bcoz slowly and steadly i want to recover my losses
gauresh59 (10/4/2013 12:48:48 PM): if you are in a position to trade for intraday with 4-5 scrips simultaneously .......then you can easily recover your loss quickly .......with momentum trading ......but it requires minimum 3 -4 lakhs ........
mahesh karnani is typing...
mahesh karnani (10/4/2013 12:49:31 PM): no sir i will nt involve more than 1 lkh now in trading and from now i will trade only in nifty
gauresh59 (10/4/2013 12:49:29 PM): with that much capital you can easily earn atleast 5k daily .....on average......but again the trade must be with discipline