Friends, I have been getting calls for how much accuracy can I achieve after doing my technical analysis course. So let me make it very clear to you how can risk management can totally change your way of trading. Let me tell you with an example, now just suppose you are taking 10 trades. See below case:
- High accuracy without risk management: Now suppose I am taking 10 trades on Nifty future and my accuracy is 80% (high accuracy). In 8 trades, trading nifty future I am making 25 points profit and only 2 trades go into loss, but my loss per trade is 100 points.
- Using Risk management with low accuracy: Now I will be following the risk management techniques here. I am using 1:2 risk reward ratio on all 10 trades. So my target for nifty will be twice as that of my stop losses. so my stop loss will be 25 points and target will be 50 points, lets consider the accuracy to be just 40%. See below, my net gain is 50 points. Now, even though I had very low accuracy (just 40%), still I was able to make money. But no gain even after having 80% accuracy.
Hope you will now focus on the risk management and not just on the accuracy. 🙂 I am looking for organizers / Partners in Pune city, for technical analysis seminar. Call me +91-9970777789 for further detail.