ilmscore | How to do proper position sizing | How many shares should I buy? | CA Rachana Ranade

How to do proper position sizing | How many shares should I buy? | CA Rachana Ranade

Published: 2022-06-22
Status: Available | Analyzed

Predictions from this Video

Total: 9
Correct: 0
Incorrect: 0
Pending: 9
Unrated: 0
Prediction
Topic
Status
An investor should allocate a maximum of 15% of their capital to a single stock.
"maximum up to 15 % should be your allocation to one stock"
Stock Allocation
Pending
Investors should further divide their allocated capital for a stock into at least three parts (one-third) or five parts (one-fifth) for staggered investment.
"ideally you should again break it down to three pieces minimum means what you can invest one third one third and one third in that specific stock if you feel that is still high you can also go ahead with one fifth"
Stock Investment Strategy
Pending
A trader should risk a maximum of 2% of their capital for any single trade.
"if you are a trader keep this as a thumb rule maximum 2% of your capital can go for a specific trade"
Trader Risk Management
Pending
Reliance Industries was at a good support level around 2400, with a potential stop loss at 2390.
"as per the technical analysis currently it is at a good support ideally it should bounce from here and if it goes down then my stop loss can be at 2390"
Reliance Industries Support Level
Pending
Based on the provided parameters for Reliance Industries (capital, buying price, stop loss), the maximum quantity to trade is 12 or 13 shares.
"maximum quantity that you should trade is 12.50 of course you can't buy 12 and half stocks so either you can go ahead with 12 or max to max 13"
Reliance Industries Position Sizing
Pending
Historical examples show significant drops in stock prices: Yes Bank (96%), RBI Bank (88%), and IB Housing Finance (93.63%) from their respective tops, highlighting the risk of not using stop losses.
"assume someone had entered at the top most position and from there the stock has gone down by 96%. Take the example of RBI Bank look at it from the top till the current position it has gone down 88%. Third example have a look at this IB Housing Finance from the top it has gone down 93.63%"
Stock Market Losses
Pending
Tata Motors experienced a substantial fall of 87.76% from its peak to its bottom.
"have a look at this Tata Motors now Tata Motors which is ideally not a bad stock in that also you can see that the fall from the top to the bottom was 87.76%"
Tata Motors Stock Performance
Pending
Applying a pyramiding strategy to a winning stock can nearly double profits compared to a simple buy-and-hold with initial investment.
"with the help of pyramiding was I able to almost double my profit a little bit more than that"
Pyramiding Strategy Impact
Pending
For investors with strong fundamental conviction, averaging down is acceptable during market dips caused by external factors. Traders, however, must strictly adhere to stop-loss orders.
"if you have done a strong fundamental analysis of that stock if you believe that the stock has nice fundamentals and let us say the stock is falling only and only because of global factors or something like that nothing is wrong in the company then you can surely consider averaging it but if you are a trader then you should have your stop stop losses right and tight in your place"
Averaging vs. Pyramiding for Investors
Pending