Scenario:
My trading capital - Rs.10,000
Day 1 - i made a loss of 1500
My capital now is reduced to 8500
Day 2 - i made a profit of 400
Question - Do i need to re-invest the profit of 400 to further trade on Day 3 (i.e) 8900, or take out 400 profit our & continue to trade with only 8500.?
Pls need an advice.
Adding profits back to your trading capital is a valid and tested strategy to scale your positions over time.
Do read this and the other chapters in position sizing techniques for more insights"
If you had a capital of 10000 and made a loss of 1500, you should have 8500 with you and later adding on the profit of 400 makes it 8900. Now it depends on what kind of trades you had done before. Can you elaborate your last 2 trades so that we can see your trading strategy and then decide. Other wise it is better to reinvest your profits back.
Now, Your Capital is Rs.8500/-
After This Your Capital is Rs.8900/-
It’s Totally up to you.
You wanna Withdrawal the Profits Or only Trade with the Initial capital.
I am Telling you this with my experience.
If I were you and New Trader.
I would withdrawal the Profits and Not reinvest in the trading.
We all know There is a possibility New Traders can lose the Profits as well as Initial capital. In few trading Sessions.
So, it better to not reinvest profit in Trading.
Better you, buy good Stocks with the Profits If You don’t wanna Withdrawal the Profits.
Once you gain Experience of 1-2 Years of Intraday Trading. You can trade with the Profits.
But still Intraday is Very simple yet very complicated.
From your trade action, it seems that , you are not following any money management rule. you are not suppose to loose 6% of your capital , that is 600 in one trade . your loss is 15% , so mistake is mistake, on your next trade , consider 8900 as your capital , write off 1100. Now for your next trade , stop loss for your capital is 6% , that is Rs 534, and on next trade don;t risk 534 ,in one trade instead divide in to 3 & take a trade ( 534 /3 = 178 stop loss per trade )
Hai
Are u student for working professional
10K is very small amount for trading
Hope u are doing intraday trading
Use stop loss always to have check n losses
U need to learn trading with indicators
Then only u can make money boss
Best Regards
Suresh B Ramaiah