Hi folks, i have a question ..what is the profit to turnover ratio of a experienced trader should be...i only trade intraday....my latest results are

buy 746763 sell 749818 profit a 3054.90 inntraday...with india infoline

but i get only 1820 (net profit b)..as rest are brkgs and other charges.(around 1200).

As these charges are turnover based..so for a given turnover profit a should be more to get higher profit b...as charges are fixed for the given turnover...is my ratio ok..or i m wasting this turnover for this small profit...what you guys think.? Can some of you post your datas ..so that i can see.....

It is difficult to comment on your "Profit to Turnover Ratio" without knowing the details of your trades.

You basically have a 0.24% gain from your total buy volume.

Now this 0.24% gain may be from 1 single profitable position or it may be combination of multiple positions.

e.g. It can a result of 3 different positions with

2% gain in first trade and 1.76% loss in other 2 positions.

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You have to see your average record over a month and then try to analyze the results.

Keep two things in mind:

1. Don't take profits too soon.

Use a trailing stop-loss or book profits partially at different levels.

2. Your trading style should produce more winning trades than losing trades.

If your gains from winning trades and losses from losing trades are almost equal, make sure your number of winning trades exceeds the number of losing trades by at least 33%..

(In case, you make losses often and profits rarely, your average profit per trade has to be much higher than your average loss per trade).

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Your final "Profit to Turnover Ratio" will depend on how to trade and what type of stocks that you trade in.

If you are going to scalp in stocks like Reliance and SBI, your "Profit to Turnover Ratio" will always be low.

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MR. ALCHEMIST....THESE ARE THE FIGURES I M TALKING ABOUT....COMMENT ON THESE PLEASE...

This type of trading would only be beneficial for your broker not for you.

jlo001, If you can maintain an net average profit of 2 - 3 % per month (and Nifty gains less than that) after deducting all charges, consider yourself as having done a good job.

I feel your brokerage is high when you are generating huge volumes. You are paying 0.15% per trade (both buy & sell sides with all charges combined).
Basically you are losing 0.15% if you buy & sell any stock at same price. This is reasonable for traders generating low volumes.
I guess you can negotiate for a lower brokerage with your RM in Indiainfoline.

please explain in more details...I m new to trading....

This is the difference between bad trading and good trading:

First image is my contract note for 4th March.
Second image is my contract note for 5th March.





I will explain my point later, but first I would like to know what you think about these trades....

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I feel the NMDC trade was a riskier one although it turned out more profitable.

In both case, I was trading on news.

The media had stated that NMDC FPO would be priced at a steep discount and I knew this would create a downward pressure on the stock.

I had shorted just 1% below previous day's close and don't really feel there was much risk.

I had kept a stop-loss at 438.05, just above the day's high of 438.

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In case on Punj Lloyd, I was also trading on news.

The only difference was that in this case, I was trading without fully understanding the impact of the news.

Maybe the news was expected and thus the market didn't really react to the news.

Source.

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This is how I see my Punj Lloyd trades:

1. Sell 100@ 179.95 (Knee-jerk reaction to news without understanding the situation - bad decision).

2. Buy 100@ 177.8 (Closing a position because it is showing profits - another bad decision).

3. Sell 100@ 180.8 (Same as point 1).

4. Buy 10@ 180.05 (Same as point 2. Moreover, I disclosed only 10% of the quantity when it was not necessary. The result was that I was able to cover only 10% of my position).

5. Sell 10@ 181.15 (Same as point 1. Shorting again in spite of the fact that market wasn't showing any negative reaction to the news).

6. Sell 100@ 181.85 (Averaging a losing trade - easiest way to lose money in the long run).

7. Buy 200@ 180.8 (Same as point 2. Best way to manage a winning trade is to either use a trailing stop-loss or book profits partially).

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The trade in NMDC was also a reaction to news, but in this case, I fully understood the situation.

Once I was short, I let my profits run.

I kept a stop-loss at 438.05 and didn't close my position till I was forced to.

I ran out of time and had to close my position at 3:29 PM....

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As you are a beginner:

Don't trade in many scrips, just trade in one or two at a time for trading (not for long term investing).

You may enter in a position due to any news or technical break-out, but be sure for your stop-loss and target price, once you are near the target price you may use trailing stop loss to maximize the profit.

thanks,..I also feel I am entering in too many stocks too early...now will restrict myself to a very few selected trades.. will inform what happened...

When to exit a trade is more important than when to enter it.

These are my trades for yesterday and today.

Imagine you had entered at the same rate and time as me.

Ask yourself, how you would have managed these trades?

Yesterday:

1. Sell 100 Bajaj Hindustan @ 160 at 9 AM.
2. Sell 100 Texmo Pipes @ 121 at 9 AM.

Today:

1. Sell 40 Man Infraconstruction @ 372 at 9 AM.

Note :I did exactly the same thing with Texmo Pipes and Man Infraconstruction, but with totally different results.


First, think how you would have managed these trades and then look down for my actual trades.






















Now this is how I managed my trades:

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you exited very early (in half hour) from Texmo... thus minimizing your losses.... but I messed up many times hoping it will come my way.... either up or down as case may be... so heavy losses.... the lesson i have learnt with holes everywhere in my pocket is... exit from your losing position as early as possible... taking small losses is good than heavy losses later.... that's my case today with Educomp...

Let us discuss our positions in intraday, with profit-loss, and the rationale behind taking that position.

This will be a great learning tool for everyone.

Post in this format :

Stock :
Date :
Trade Pattern :
Rationale :

BUY : @MKT/LIMIT @PRICE No. of Shares
SELL : @MKT/LIMIT @PRICE No. of Shares

ANALYSIS : Your Analysis.

I will chip in with my experiences :

Stock : Gujarat Gas
Date : 10th March,2010
Trade Pattern : Long
Rationale : Stock was cum dividend with a Div Yield of 3% on CMP. Expected upmove on positive market.

BUY : @MARKET ORDER @264.56 180 Shares
SELL : @MARKET ORDER @267.26 180 Shares

ANALYSIS : Was too quick to realize profits. Should have hold on to profits to sell @270.

profits realized in 15 minutes that's too quick....unless reversal taking place...