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Risk Management
This module is helping you to figure out how much RISK you should take per trade. Let’s understand these with below 2 case studies:
Case I: Consider you are trading in CASH segment, and you have 1L amount in your Demat. And consider buy signal is given by Finanthropist Research team, so for ex. Buy at 200/- Rs and Stop loss is 195/- Rs. Let’s provide these input to Risk Management Calculator:
Our experts suggest you should take 1% risk of your capital per total trade for Cash Segment. So you should trade with 200 quantity of that stock. In case of Stop Loss will be hit, you only lose 1000/- Rs, that is under your Risk Management.
Case II: Consider you are trading in Future segment, and you have 2L amount in your Demat. And consider buy signal is given by Finanthropist Research team, so for ex. Buy at 500/- Rs and Stop loss is 495/- Rs. So our experts suggest you should take 2% risk of your capital per trade for Future Segment.
With the above inputs, your trade is not in risk management, because Stop Loss amount i.e. 5000/- is greater than Risk amount i.e. 4000/-. So if you still want to take this trade, it should be in cash segment with 400 Shares quantity. By this way you can secure your fund.