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    Price Action & RM-PS Spider PDF

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    This document provides an overview of a webinar on price action trading strategy using risk management and position sizing. The webinar covers understanding price action and using moving averages with price action, risk management and position sizing with real-time examples, and real-time case studies combining price action and moving averages. It also discusses trend identification, types of moving averages used in technical analysis, and calculating position size based on account size and risk tolerance. The importance of risk management, position sizing, and not overtrading are emphasized.

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    Price Action & RM-PS Spider PDF

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    268 views28 pages
    This document provides an overview of a webinar on price action trading strategy using risk management and position sizing. The webinar covers understanding price action and using moving averages with price action, risk management and position sizing with real-time examples, and real-time case studies combining price action and moving averages. It also discusses trend identification, types of moving averages used in technical analysis, and calculating position size based on account size and risk tolerance. The importance of risk management, position sizing, and not overtrading are emphasized.

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    This document provides an overview of a webinar on price action trading strategy using risk management and position sizing. The webinar covers understanding price action and using moving averages with price action, risk management and position sizing with real-time examples, and real-time case studies combining price action and moving averages. It also discusses trend identification, types of moving averages used in technical analysis, and calculating position size based on account size and risk tolerance. The importance of risk management, position sizing, and not overtrading are emphasized.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    268 views28 pages

    Price Action & RM-PS Spider PDF

    Uploaded by

    Genrl Use
    This document provides an overview of a webinar on price action trading strategy using risk management and position sizing. The webinar covers understanding price action and using moving averages with price action, risk management and position sizing with real-time examples, and real-time case studies combining price action and moving averages. It also discusses trend identification, types of moving averages used in technical analysis, and calculating position size based on account size and risk tolerance. The importance of risk management, position sizing, and not overtrading are emphasized.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    The key takeaways from the document are price action trading strategy using moving averages and risk management. It discusses understanding price action, using moving averages to determine trends, and real-time case studies of different stocks. It also covers topics of risk management and position sizing.

    Price action trading refers to analyzing a security's price movement over time to predict future price changes and identify trading opportunities. It focuses on patterns in candlestick charts and changes in market sentiment reflected by prices.

    The main moving averages used in price action trading are the 20-day, 50-day and 200-day simple moving averages. Moving averages help smooth price data and identify trends and support/resistance levels.

    Sponsored by Spider Software Pvt Ltd

    Price Action Trading Strategy Using


    Risk Management & Position Sizing

    By- Rishikesh Singh


    (Investor, Trader, Mentor & Co-Founder Equity4Life)

    Free Telegram Channel ID: Equity4Life (t.me/equity4life)


    www.equity4life.in
    DISCLAIMER
    ➢ I am NOT a SEBI certified Research Analyst or
    Advisor.

    ➢ All the stocks discussed & examples taken in this


    webinar is solely for educational/learning purpose.

    ➢ Do not consider it as a buy or sell recommendation.

    ➢ Do your due diligence before investing/trading in


    such stocks and consult your advisor for the same.
    What we will
    What I willbe covered
    cover today
    Today ! ?

    ➢ Understanding Price Action.


    ➢ Trading using Moving Average with Price Action.
    ➢ Risk Management & Position Sizing with real time examples
    ➢ Real time case studies based on Price Action + Moving
    Average.
    ➢ Q&A Session
    PRICE ACTION + Moving Average
    PRICE ACTION
    DCM SHRIRAM WEEKLY CHART
    SPICE JET WEEKLY CHART
    JAIN IRRIGATION MONTHLY CHART
    TCS WEEKLY CHART
    DLF WEEKLY CHART
    TREND
    Price moves in trends “Trade with the trend” is the main strategy behind
    technical analysis.
    Once a trend has been Established, the future price movement is more
    likely to be in the same direction as the trend than to be against it. Technical
    analysts frame strategies based on this assumption only.
    Moving Averages
    The moving average (often shortened to "MA" in our research) is one of the
    most popular indicators and is used by technical analysts for a variety of tasks:

    ➢ to identify areas of support/resistance


    ➢ to determine the trend

    Advantage :
    1) They smooth the data and thus provide a clearer visual picture of the
    current trend
    2) M.A signals can give a precise answer as to what the trend is.

    Disadvantage :
    1) They are lagging rather than leading indicators but this should not be a
    problem to longer term investors.
    Main moving Average to follow : 20 , 50, 200.
    Real Time Case Study

    • MGL
    • LT
    • GODREJCP
    • HAVELLS
    • HUL
    • NIFTY, SENSEX & BANKNIFTY
    • VOLTAS
    • ASIAN PAINT
    • FINEPIPE
    Risk Management & Position Sizing
    RiskWhat
    Management & Position
    I will cover Today !Sizing
    TOPICS TO BE COVERED IN RM & PS
    ➢ Focus on risk management ?
    ➢ How to lessen the impact of losing streaks and draw downs?
    ➢ Steps to ensure proper risk management
    ➢ How to calculate your position size

    What should be the primary goal of trading ?


    Making Profit…….. ?
    The main object of trading should be to PROTECT CAPITAL.

    NO CAPITAL, NO CAPITAL MARKET


    We have to strike a balance between NOT TAKING RISK (Not
    more then what you can afford to loose) & TAKING ENOUGH
    RISK (So that is winning is meaningful).
    What makes a successful trader
    5%

    15%

    Psychology
    Position Sizing
    Setup
    55%
    Luck a.k.a Karma
    25%
    POSITION SIZING
    Position sizing is an important part of a trading system that tells
    us how many shares to buy or sell per trade.

    Position sizing help us to determine:


    ➢ How many shares to buy or sell for a particular trade .
    ➢ Your risk per trade and overall risk to your portfolio.
    ➢ Your expected returns to your portfolio.

    The risk reward ratio (R:R) should always be greater than or equals to 1:2
    POSITION SIZE CALCULATOR

    Step to calculating position size


    Step 1: calculate your capital = share holding + cash
    • Example: Rs. 10,00,000/-

    Step 2: Determine your risk per trade?


    • Risk refers to the maximum you can loss per trade.
    • This is the maximum you can lose if your stop loss is hit.
    • Never risk more than 1%-2% of your capital on any one investment.
    • Once you have decided a percentage of your risk, always follow same % of
    risk & do not change in between.
    SPICEJET Weekly Chart
    Step 3: Determine your position size for each investment

    No of shares = % Risk Per Trade x Capital


    Risk Per Share

    Example : You want to go long on SPICEJET in cash market at


    Entry rate of 93
    Stop loss 72
    Target at 150

    How many shares can you buy (Taking 1% risk)


    No of shares of SPICEJET = 1% X 10,00,000 = 10000 = 476 shares
    21 21
    Total investment in SPICEJET = 476 shares X 93 = 44285/-
    Here position size is 44285/- Risk is 10000/- Reward 27130/-
    POSITION SIZING CALCULATOR
    ACCOUNT SIZE 1000000 <-- Input Data
    RISK PER TRADE 1.00% <-- Input Data
    (Ex. 1% or 2%)

    Number of Shares 476.1904762

    ENTRY 93 <-- Input Data


    STOP LOSS 72 <-- Input Data
    TARGET 150 <-- Input Data

    Total invested 44285.71429


    Allocation (%) 4.428571429
    RR ration 2.714285714 (Always make sure that RR is > 2)
    Return on Invested Capital (%) 61.29032258
    Return on Total Capital (%) 2.714285714
    Drawdown on Trading Capital % return to break even

    10% 11.11%
    20% 25%
    50% 100%
    70% 233%
    90% 900%
    100% Wiped out

    ➢ Larger the drawdown on trading capital, the more its is difficult to return to break even.
    ➢ So do not take more then 10% cumulative risk on your trading capital or else max 20%.
    Important point to note:
    ➢ At any point of time one should not have more 10% of cumulative risk.
    ➢ Always diversified your investment into different sectors. For example if
    you buy 10 stocks make sure they are from different sector. (Ex. Recently
    we hade turmoil in NBFC sector.)
    ➢ Also make sure you have equal number of long & short position.
    ➢ Sometimes waiting for the right trade or right risk reward ratio is also a
    best option. (NO TRADE IS ALSO A GOOD TRADING DECESION)
    ➢ HONOR YOUR STOP LOSS.
    ➢ Do not get affected by continuous loosing trades
    ➢ Outcome of all the trades will be random i.e. profit & loss never follows a
    fix pattern.
    Trading Without
    Risk management
    is Injurious to your
    Trading (WEALTH)
    & Mental capital

    ➢ You can recover the loss made in your trading capital but recovering
    the loss of your mental capital is very difficult.
    ➢ In order to survive in any competitive field protection of mental
    capital is must.
    ➢ Protecting mental capital means not getting frustrated with
    continuous loss making trades & thus not effecting subsequent trades.
    Never Stop LEARNING,
    because MARKET never stop TEACHING.
    THANK YOU
    Free TELEGRAM Channel: t.me/equity4life
    Twitter Handle: @Rishikesh_ADX
    Whatsapp/Call: +91 8938008007, +91 9808498085
    Website: equity4life.in

    For Spider Software Support: 9871232453

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