see am not a text book stuff guy. These 1:2 RR, Dividing capital by 10 and only trading 10% of capital, or having stoploss as 2% of capital… all these text book stuffs or traditional things are advocated by many experienced traders. This doesn’t suit me.
You might consider me a non traditional guy who doesn’t follow this, so am not sure my way of trading will help you.
Like I have mentioned earlier my strategy depends on price action which includes OI.
Let say for Example If nifty opens at 17500 and I have a confirmation that nifty is going up, and I made my entry at 17550, I see OI resistence at 17600 and 17700 means I will wait for nifty to touch 17600 or close to 17590, If I see the price struggles at that range I will exit my position there, If Nifty crosses 17600 I’ll keep my trailing stoploss at 17590, Nifty might retrace at 17590 to 17600 and then again move up. In this scenario I’ll raise my Trailing stoploss by 25 points, Nifty might either touch 17700 or can struggle past 17650, so I’ll exit around here.
my initial SL would be 20 to 25 pts below the previous support. why 25 pts below the support because many times i have seen Stoploss hunting at support so I keep little below.
So I have mentioned my way of trading. In your case your entry would always determine your RR.
If you have your entry at the beginning of a trend mostly your Stoploss will not hit and your reward of 2% will be mostly achievable. If your entry is at the middle of the trend or at retracement, the so called 1:2 RR will not work.
whenever you made your entry in the middle of a trend you never know how long will the trend will continue so you always need to be ready to exit your position to exit with some profit or avoid loss. You just cannot calculate 2% from your entry and make an exit order and wait for it to get executed. In Intraday you always need to dynamic.
If say in the above example nifty has moved from 17500 to 17600 and retraces at 17550 , and if you have made your entry at 17550 you never know If nifty will cross 17600 or it will go max 17600. so you need to be ready to close to 17600.
whenever you have made a good entry don’t restrict yourself for 1:2, sometimes you might get 1:5 also.
don’t always follow text book stuff, try to be dynamic and have little modifications which only help.