In my last post, I tried to write something about sitting tight and letting our winning trades run so that we can maximize profits from the winning trade. Now today, I would like to formulate some guidelines on how we can let our winners run more. Here they are.
Guidelines on holding on to the winning trade to maximize gains:
This way as per data, typical trade performance will be like this. Out of 10 trades, 3 to 4 trades will give us big profits. 3 to 4 trades will hit initial SL and 2 to 3 trades will hit half SL. Keeping this in mind, if we initiate all trades with 1:8 risk to reward, the trades will most probably perform like this.
4 trades = 8 points of profit. Total = 32
4 trades = 1 point SL. Total = -4
2 trades = 0.5 point SL. Total = -1
So gross profit will be like 27 points in average 10 trades.
We need to understand very clearly that we can follow these guidelines only if we have a proper mindset for trading and we are financially and mentally prepared for 5 to 6 SLs in a row. Because most of the time, though the trade will move well in favor eventually, we may still end up getting a SL hit. But whenever it works, the jackpot trade will take care of all SLs and give us a good profit at the end.
Now to make it more clear to you, I post here this current month's stock future trading performance along with charts marking entry and likely exit levels per guidelines that we have discussed here.
(click on image to enlarge or zoom)
Guidelines on holding on to the winning trade to maximize gains:
- As per trading data of “Champion Futures Trader” a paid Telegram trading channel, where we trade in stock and Index futures for last one and half years, it has been observed that 3 to 4 trades out of 10 stock future trades make big profits like 15k to 30k per trade. The following guidelines will help us squeeze maximum juice out of these big winning trades. Please keep in mind, these are applicable to stock futures only because stocks will only move 5-10% or more in a day, Index will never move that much.
- After entering into the trade at desired level and placing SL order, we can wait for some time and see how the price moves. Always first one hour into the trade is crucial. If it were to hit SL, it will mostly hit it in first 10-15 minutes into the trade. If the trade survives first one hour (most probably we have got our super winning trade), we can trail SL to half. For example, if we initiated trade at 305 level and SL is at 303.50, we can trail it to 304.25 after one hour into the trade.
- Now after trailing the SL, we don’t need to do anything. If it suddenly reverses or becomes volatile, it will hit our trailing SL. If it doesn't hit it, it again confirms that the trade is moving very well.
- When to book out: In trading, there are only two important factors, price and time. In day trading, as you know, time is against us because we need to close the trade before the market close. We don''t have luxury of time. So we need to take into consideration both these factors for profit booking, i.e. price as well as time. As per my trading data analysis, it makes sense to book out either once we get 7 to 8 times of profit of initial risk or between 2 and 2:30 pm. For example, let's say we entered at 305 with SL at 303.50, i.e. initial risk of 1.50. For that we can expect profit of 11 to 12 points in that trade before 2 pm. If the trade does not move that much, i.e. 7 to 8 times of initial SL and let's say it is 2 pm, we can book out any time between 2 to 2:30 pm and lock whatever profits we have made.
- So in other words, we will either book out at 7 to 8 times profit of our initial risk or between 2 and 2:30 pm, whatever occurs first.
This way as per data, typical trade performance will be like this. Out of 10 trades, 3 to 4 trades will give us big profits. 3 to 4 trades will hit initial SL and 2 to 3 trades will hit half SL. Keeping this in mind, if we initiate all trades with 1:8 risk to reward, the trades will most probably perform like this.
4 trades = 8 points of profit. Total = 32
4 trades = 1 point SL. Total = -4
2 trades = 0.5 point SL. Total = -1
So gross profit will be like 27 points in average 10 trades.
We need to understand very clearly that we can follow these guidelines only if we have a proper mindset for trading and we are financially and mentally prepared for 5 to 6 SLs in a row. Because most of the time, though the trade will move well in favor eventually, we may still end up getting a SL hit. But whenever it works, the jackpot trade will take care of all SLs and give us a good profit at the end.
Now to make it more clear to you, I post here this current month's stock future trading performance along with charts marking entry and likely exit levels per guidelines that we have discussed here.
(click on image to enlarge or zoom)
Here are intraday charts of all Jackpot trades along with markings of entry and exit as per guidelines, so that you too can understand how the Jackpot trade really moves during the day.
(click on charts to enlarge or zoom)
These are all real trades witnessed by 18 other traders during live market.
If you are interested in day trading and want to benefit from such trades, you too can witness it during live market by joining "Champion Futures Trader" on a trial basis for 2 weeks before you decide to risk your money at very nominal charge. Send a mail to charttechnicals@gmail.com for more details.
