Making Trade Adjustments Is It Helpful

Making trade adjustments can help you reduce losses to some extend but not eliminate loss. For example sometimes option buyers average out buying options. Like buying at 10 then 7 then 5, thinking that since the average buy rate has come down, if the stock takes a U-Turn they can exit in profits.

Very rarely it happens, their entire money invested becomes zero (option expires worthless). There is only 1% chance that within limited time-frame the stock revives and takes a U-turn and the trade becomes either profitable or the trader exits with a small loss.

Fact is, if the trade was entered poorly the Trade Adjustments will not be helpful at all. It can either minimize losses or sometimes increase the loss.

For example if a trade with 80% success rate makes 1000 rupees and loses 4000 rupees then that 80% win rate is useless.

Here it is:

+1000
+1000
+1000
+1000
-4000
+1000
+1000
+1000
-4000
+1000
=======
Net ZERO
========

Imp Tip: If you make sure that your losses are reduced by 50% then the same trade above will be profitable.

+1000
+1000
+1000
+1000
-2000
+1000
+1000
+1000
-2000
+1000
=======
Net +4000
========

For this to happen you have to ensure:

1) Good entry points – entry time is very important for the trade to be profitable.
2) Proper stop loss placement.

Note that one trade is not enough. If you decided to trade something you must trade at least 10 times to see if it’s a good trade for the long term or not.

COPYRIGHT INFRINGEMENT: Any act of copying, reproducing or distributing any content in the site or newsletters, whether wholly or in part, for any purpose without my permission is strictly prohibited and shall be deemed to be copyright infringement.

INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However, every trade depends on the trader and his level of risk-taking capability, knowledge and experience. Moreover, stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website.

DISCLAIMER: I am NOT an Investment Adviser (IA). I do not give tips or advisory services by SMS, Email, WhatsApp or any other forms of social media. I strictly adhere to the laws of my country. I only offer education for free on finance, risk management & investments in stock markets through the articles on this website. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given on this website. I am not responsible for any investment decision you take after reading an article on this website. Click here to read the disclaimer in full.

Disclaimer | Privacy Policy | Terms and Conditions | Refund Policy | About Me | Conservative Option Course | 200+ Testimonials - What Traders Say About This Course | Contact Me

My student gets the Winner's Certificate of Zerodha 60-day Challenge - Click here and Open Stock Buy and Sell Free Account with Them Today!!!