Pidilite alltime high

Pidilite industries break out its previous high of 188 day before yesterday with good volume and cmp is 189.7.
I think it is a good buy @ cmp with stoploss of 176.
Share ur views.

 

Thanks for great word like gem.

 

Bought @ 191

 

Sanjay, whats the target you have in mind ?

 

Every one has different type strategy to book profit as shabbir said ur target should twice/thrice of ur stoploss.
I do the same thing but in a different manner which is secure ur money time to time cause greed is big enemy in stock market.

My previous way to book 50% profit @ equal to ur stop (1:1) and book remaining 50% at double of ur stoploss(1:2),same way revise the stoploss to ur cost at 1st target achieved.

Then I changed my way to book 50% profit @ equal to ur stop (1:1) and book 25% at double of ur stoploss(1:2),same way revise the stoploss to ur cost at 1st target achieved then revised the stoploss to ur 1st target price and book remaining 25% at thrice of your stoploss(1:3)

My current way to book 40% profit @ equal to ur stop (1:1) and book 30% at double of ur stoploss(1:2),same way revise the stoploss to ur cost at 1st target achieved then revised the stoploss to ur 1st target price and book remaining 25% at thrice of your stoploss(1:3).

About pidilie I bought @ 191 and my stoploss is 176

stoploss 176 1st target 206 for 40%

stoploss 191(my cost) 2nd target 221 for 30%

stoploss 221 (1st target) 3rd target 236 for 30%

U can choose any method to book profit but always set stop and target before the purchase to avoid huge loss.

 

Sanjay, thats a great strategy - thanks for the detailed info.

 

Thanks Sanjay ..great info.....well..how do you scan stocks ? is t purely random or you hv prepare list stock tat you keep visiting every day for signals?

 

Also.. how long you would wait to book profit as one may have limited time if Future position taken? or you prefer cash market so as to meet stoploss/target with extended time period ?

 

I scan stocks by looking at 52 weeks high, top gainers, volume shockers for long.
And for shorting I scan by looking at 52 weeks low, top loosers.

If any of the stock shows me a good pattern in above category then I choose that one or add in my watch list.

 

I don't set any time frame, in cash market there is no problem with holding long but in future u have limited time frame so I choose next expiry for example this is sep. series and if I plan to trade in future I will choose oct. series.

Normally one week to two months is the time where my trade got matured either with target or stop loss.

 

thanks sanjay.....there has been grt learning so far from the day i got introduced to shabbir's blog....thanks a lot to all those who r making valuable contribution to this forum ...last but not least ..big thanks to Shabbir for starting all this.

 

When you bought @ 191 and kept stop loss @ 176..if unfortunately stop loss is triggered then its almost 8% loss..dont you think the loss is much at higher side..I think typically the recommendation is to exit with max 2-3% loss and for profit target may be 2 times of stoploss or more depending on current market situation & technical analysis.

 

Somewhere ur right but when buying/selling u have to see the support/resistance also.

U said 2-3% loss means if i bought @ 191 then my stoploss should be around 187-185 and target should be around 199-203.If I plan to trade in intraday then may be I think that way but unfortunately because of busy schedule I can not be online Continuously and also there is much higher chance to hit stop loss cause that is not support level.I have chosen 176 as stop cause there is support and if u see the chart clearly u can see that previous high of the stock is 186&187 (resistance) on 30/4/12 and/2/5/12 then again on 8/8/12 then again on 23/8/12 when it gave break out with volume that is the breakout level where I choose to get in trade and the last support is 176, So I chosed 176.
But u can choose 185 as stoploss also because resistance become support after breakout.
But that way u have higher chances of hit stop also.
For 8% as stoploss u said higher but according to me stop loss should be between 10-15% more than 15% is higher.
For 8% stoploss I am looking for target 8% then 16% and finely 24% so I dont think this is bad trade cause we are investing for target not for stop loss.
If u have more query feel free to ask.
Regards
Sanjay sansanwal.

 

I understand what your saying. But in my opinion it all depends how much capital u have ..if some one like me who is starting with less then 50k of initial capital and a newbie in market then taking such huge losses may lead some on to lose all of them with matter of no time. So loose only that much that your still in position to stay longer in market...in short to be benefited from trading, lose small and earn little more then what you lost for little longer period of time.

 

I don't think to stay longer in market by aiming small stop is good idea cause according to me ur aim should be hit target not to be in market longer by hitting small stop loss.
Stoploss should be the level where u see support so that it will make u more comfortable that u r not going to loose many times and as shabbir said u can earn by 6 good trade out of 10 ten trade.
About initial capital of less then 50 k, suppose u have 20k then divide it in to 4 parts and trade with each part by discipline means for every trade u r putting 5000 bucks.

Suppose u have done 10 trades.
1st 5 trades are like this
S/n Amount Loss @ 10% profit @ 20%
1st 5000 500
2nd 5000 500
3rd 5000 500
4th 5000 500
5th 5000 500
Loss of total Rs 2500/- in ur first 5 trades and if u have fear by all these above data then stay out of market or do some paper trading before entering in market.


Why?
Because u r not ready to take loses or ur fear is more and greed/fear is the biggest enemy in market or u don't have enough confidence to stay in market or u r not analyzing correctly or may be bad luck.

Now come to previous example of ten trade if u wish to continue to be in market.

2nd 5 trades are like this
S/n Amount Loss @ 10% profit @ 20%
1st 5000 1000
2nd 5000 1000
3rd 5000 1000
4th 5000 1000
5th 5000 1000

profit of total Rs 5000/- in ur 2nd 5 trades.

By 1st 5 trade loss of 2000 from initial capital of 20000
By 2nd 5 trade profit of 5000 from initial capital of 18000

Now ur capital is 23000 around 15% profit.

 

Thanks Sanjay..Very nice illustration ..i guess i got your point and i do agree with you. With 50% success ration and strict stop loss we do make considerable profit. And keeping SL at support level do make sense.

But I do want to make one point here that if immediate support is very deep (for me deep is 10% below the Entry price) then one should keep smaller SL lets say 2% then i agree you may hit SL very often but you will always have another opportunity to enter in same stock when price meet entry criteria again. This way you never hv to block your money for long. e.g. One trading with SL 10% & Profit target 20%, If price constantly moving toward SL and price retrace from just above the set SL level without hitting SL then there is still big wait to hit set profit target of 20% as now price has to grow by 33% to meet original target. It may take forever to make such big move if stock is not fundamentally good.

It Also depends upon what kind of investor one is. If one is very busy guy and cant find much time to track market then keeping big SL may make sense as they need not worry about hitting SL very often. But for some investor if they can monitor market regularly small SL should not be any problem as they can easily get back in again when entry criteria meets. But one has to be very consistent following their preferred SL/Prof Target and they shall win.

So there are N number of strategies that one can employ provided they have sound money management. No matter what is your SL the basic need is discipline, good strategy and consistency no matter what happen one should stick to a good tested strategy for longer period of time to get consistent benefit from market.

Well ..Sanjay I do value all your inputs in previous posts..they are really insightful for being a good trader.

 

50% success ratio is ok but not good cause that much u can earn easily by some safer funds like Rd,Fd and Insurance by long term investment with out any risk.

I gave that example just to explain discipline in market and according to me if some one has success ratio of 50 % in market then he has to learn/practice more.
According to me atleast 60 % success ratio one has to have and above 70 % I can say good.