Right Stop Loss For Every Situation - अब 90% ट्रेडर कभी मार्केट से बाहर नहीं होंगे - YouTube

Greetings ,

my name is Pravin Khetan,

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today's topic is right way to apply stoploss.

and I bet that 90% of the traders,

those exit after bearing loss

they will never go out from stock market.

and yes, you're hearing it right, this is my bet.

if you apply this single technique, then you'll never get out of stock market.

if you're new trader, or old one. if you're just starting and don't have any knowlege

still you will stand firm in the market.

and won't exit the market after bearing heavy losses.

most of the people don't know what is stoploss.

stoploss is when prices will go down the certain level then will book the losses.

it's okay but this won't help you stand firm in the market, the method i will tell you,

will help you stay in the market and my agenda for today is,

adopting it, will help any trader new or old stick into the market.

earn alot of money, and fullfill the dreams.

so let's understand how to apply stoploss.

and stick in the market without bearing the loss.

watch this video, till last. because if you won't understand word-by-word. then, there is no sense.

i'm training instock market from last 10 years, and in 10 years i have taught

face-to-face 10,000 students and online 1.25 lakh people are following and everyone is taking benefit.

so I hope that you watch this video carefully,

and extract of my 10 years experience is being used in this strategy.

if you still don't use it then maybe after 5 years you'll realise that this man was correct.

and actually this need to be applied, if you've to stick in the market.

so first understand what is the stoploss. stoploss is point where you must come out and accept that your trade went wrong.

it was a bullish signal, i wanted to buy but it went down and hit my stoploss.

so i accept that i traded wrong,my analysis was wrong.

this was supposed to go down, not up and i will exit after bearing the loss.

and maybe again, i do equity trade so that we will be profitable if prices do down.

stoploss means that basically the analysis is wrong so don't be in huge loss, exit the market.

take second position.

this is true meaning of stoploss

but people,says that 1-2% below you buy is a stoploss,it should not be big.

okay fine,

sometimes, your stoploss triggers and prices went up again.

then you regret what is this, whenever I apply stoploss prices hit and went up.

don't get panic, i will help you understand the right way and you'll still laugh if losses come..

i will be in profit today, indeed losses came.

this is my bet, you will be in a profit.

now lets understand majorly there are 4 types of stoplosses.

percentage stop, level/chart stop, volatility stop, timed stop.

most people focus on chart/level stoploss. this is my resistance if price go below resistance so I will exit.

I short-sell prices, price went up, loss is there I will exit. so most of the people apply stoploss on support resistance.

or watching moving average- indicator

this is not that much beneficial, as compared to percentage stoploss.

what is in % stoploss, 2%-3% . its' fine, watch it and then you'll realise how powerful it is

so lets understand how it works.

as a rule of thumb, few people suggest that losses are not more than 2% of the traded value.

I traded for 10,000 so my loss should not be more than 2%.

2% means 200, if more than that loss occured i would be out of trade.

most of the people, says this but actually this is not so correct.

what is correct? you booked 2% losses so not on traded value . 2% on total capital

let's assume my capital is 1 lakh so my maximum capicity of loss each day is 2%

means 2,000 is bearable loss for me.

according to this if i fully invested 1 lakh then before loss of 2,000 i will quit the trade.

but if im trading for 10,000 then i can stoploss for 20%, because 20% of 10,000 is 2,000

so for my whole capital it will not be more than 2%

some people complain that sir stoploss is below 7-8%

the answer is divide your capital by 1/3, 1/2, or 1/4.will it work?

will you be out of losses? no, you have to make one more improvization here,

now i will tell you

one more thing is, you've to set monthly loss limit. if loss is 5-10% monthly

then you won't trade whole month, next month directly you will trade.

and try to have secondary source of earnings so that you can negotiate loss of first month.

it's better to invest salary in trading

risk-less capital is the one where you don't have tension if losses occur.

so stop doing trade that month, and next month trade directly.

why this? because you'll stick to the market by this,

if you continously bet, then its' not like you're immortal and will stick in the market.

discipline is important, secondary souce of earning is important in trading

you're taking tutions,job, rental income, your wife is earning or what so ever.

this helps you in mental piece and you can generate wealth in trading.

i wil make a video on this later-on.

how to apply percentage stoploss.

so, lets setup % stoploss, lets assume your capital is 1 lakh.

listen carefully, it works wonders.

daily limit is 2,000 . more loss is not bearable in each day. it means 2% is your daily limit.

what we will do is divide this 2,000 in 4 trades

means in each day we will do 4 trades

in per trade i won't bear loss of more than 500

daily loss limit on 2 lakh capital is 2%

normally,not more than 1-2% should not be set.

so 4,000 is there,you can do 4 trades in each trade 1,000 per trade should be maximum loss.

let assume 2000 is daily loss limit,2% of your total capital.

and divide it in 4 trades, so in each trade 500 is the maximum loss.

now, why divide it in 4 trades?see, as a rule of probability if you toss a fair coin the chances are there on a random basis

one out of 4 trades will be in your favour.

means coin is favour and tossed 4 times so .25, .25, .25, .25 is the total probability of 1 would be

there 1 will be once in 4 times in your favour.

so this is a key point here,

during training keep your risk-reward ratio to 1:3

and divide this trade in 4 parts then it would be great.

i know this sir, what is new in that?

if you keep 1:1 risk-reward ratio then also you wouldn't be out from this market.

this is new because even after 1:1 risk-reward you won't bear the losses.

because you wouldn't get 1:3 trade,

5% is going and 15% is coming

but you get that 5% is going and 5% is coming.and if still is the case, you won't occur the loss in market.

example 1- lets say, price of share is 100rs. and chart's stoploss is 98, so let's buy 250 shares

and if it falls 2rs, then will cut the position and maximum loss would be rs.500

so, this is a set-up according to this let's say, share price is 100rs,

and stoploss isincreased to 95% and number of shares we have is approximately 100 shares.

last time we had 250 shares because stoploss was rs.2 and 2*250 =500 was maximum loss.

this time stoploss is of 5rs so we reduce no. of shares what will happen is

if price of share would fall still we will be in profit only.

it means that in both the cases maximum loss will be 500rs.

the benefit will be if you trade accuracy is only 50:50. you will make 2 trades in profit & 2 in loss.

so, lets suppose the risk-reward ratio is 1:3. you will make profit of 1500 and loss of 500

so in 2 trades 1500*2 = 3,000 is your profit.

okay, so if you trade 2 more and loss occurs , ratio of accuracy is 50:50 so you will do a loss of 1,000 in 2 losses.

net 2,000 will be profit which is 2% of total capital.

which is really good.

now if you say, no our risk-reward ratio wouldn't be 1:3, it would be less so profit would be less and loss would be more then

1:2 is ratio , if it comes then 1000, and 2,000 would go. if in one trade 500 would come and 1000 would go.

this is 1:2 accuracy. so in 2 trades, 2000 would come and according to 500, 1000 would go in 2 trades.

as you said loss not more than 500

still profit would be 1% perday, you're still in profit.

probability of accuracy is 50-50,still you're in profit on reward ratio of 1:2

now will trade in which 1:1 is ratio , means 10 would come and 10 would go. 500 would come, 500 would go.

in this situation in 2 trades,you would make 1000 and in 2 trades you will loose 1000

still its no profit no loss, you're still in market.

and it's not that accuracy is always 50% accuracy can be 60% also.

out of 10 , 6 trades would go right then we will be in profit.

so in this situation also, you're performing good.

let say 4 on 4 trade goes wrong, so accuracy is 0%, nor even 50-50.

what will happen then?

in that case, max 2% loss will happen

in each trade, if the loss is 2% , after 25-30 trade 1 lakh will be 0 . it's not that your destiny is actually so bad.

25 -30 trades go wrong, so probability is very less.

try this technique, and you will stay in this market. most of the traders have discipline,

remaining exits from market because they don't listen.

last thing is you should make sure, monthly trading limit is not exceeding.

you won't trade for whole month if monthly trading limit is 5%

WHY THIS?

See earning money from trading every month is important . but living is more important in life,

if you would destroy the money, then you won't have money to do trading again .

discipline is very important , so that loss can be fullfilled from other income. .

i have made a video on this risk-reward ratio

it is in premum study pack, if you want you can take our pack that is a different thing

three more remaining strategies are there,

level/chart stoploss, volatility stoploss, timed stoploss

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and improve your trading, meet you guys in next video ,till then apply this

and stay happy, complete your dreams til then bubyee.