A better way to remain profitable in trading is to take partial profits when your trade goes in your direction.
When a trade goes in your favour you can take 1/4 or 1/2 of your position as profit and bring your stoploss to your entry point and let the remaining position continue to move in your direction.
For example, one way to take such trades is to use Regular-MIS(Limit or Market) order to buy 100 shares of a stock and add a stoploss by a Regular-SL-M order for the same. As soon as the stock moves in your direction, you can lock some profits by selling 1/4 of your position (i.e, if your profit target for a trade is Rs.1,000, you may decide that a profit of Rs.250 needs to be protected). Or else simply let your stoploss hit.
But the problem with this method is that:
- It is time-consuming to separately place an order for stoploss. This time lag while placing a stoploss can lead to unexpected losses.
- You have to modify Qty of shares from Pending orders every time you book partial profits, which is again time-consuming.
- You have to cancel the SL-M order after your targets have been hit. Forgetting to do this could lead to unwanted trades.
So, what’s the solution to this problem?
Cover Orders(CO) does not solve this problem, as you cannot take partial profits from it.
One way to solve this problem is to create a type of order that can let me take a Regular-MIS order with a stop loss section added for it.
Click on the image below to zoom in:
This partial profit booking feature can help the day traders to remain profitable longer.
It will be appreciated by many day traders.
So, it’s a request to the Zerodha team to bring on such a feature to Kite.
Anyone reading this can feel free to give suggestions.
TLDR; A system to book partial profits and remain profitable intraday.
Note: This is for a day-trading feature.