How should one decide as to how many shares one should buy in case there are sufficient funds to execute a huge order ? Say for ex. Cipla Ltd is trading at 610 a share and I have got sufficient balance in my trading a/c to buy 2000 shares as CNC. I can even buy additional shares in MIS. So what should be the suitable size for such an order ?
If you are a big investor so do not buy the stock in a single day. Buy small amounts everyday or every week. This can guarantee that you bought shares at an average price.And also do not buy a single stock, diversify you investments, because if the stock you bought fails to rise or goes down you can loose much money.
And do not even dare to buy in MIS with big quantity. Because when buy small quantity you can sell your shares in price you want. But big quantities when sold can bring the prices down even than your initial buying price. So you can have big losses in a single day.
So answering your question, you can buy that quantity intraday which do not make the prices change too much.For CIPLA it can be around 500 shares when trading intraday.
I think the best time to invest is when the whole market is down i.e in the bear market. Because bear market has to end and a bull market comes again. Therefore if you have bought in bear market i.e in lower prices. Your gains could be much larger.
Do not put all the 12 lakhs in CIPLA, spit among other shares in your portfolio.
Do some fundamnetal analysis and invest for short term or long term.
Keep only 50k to 1 lakh as your intraday money and buy using MIS. CIPLA is 9x leverage, so buy some 1000 shares or so in intraday.
Read the zerodha 60 day challenge blog on Intraday winners, you could see they use only 50 k as investment for intraday not more than that (since you are already getting 9x leverage), If you invest too much money on MIS there is risk of loss which you cannot recover in a single day.
it really depends upon the risk you wish to take. 1% is generally fine.
Basically institutions or large investors who can move the market decide whether or not to move it in a certain direction depending upon the sell/buy orders in that direction. So when you place BOs and take trades in large quantities, the large investors with access to NSE higher level data can see that you have put a target order too and once they notice that, they will then push the security in the opposite direction of your trade. Because getting it past your bulky order is going to be expensive and therefore they choose to go in the opposite direction. However, I am still looking for an answer to this question. How much is too much. Can it be 1-20th of the 5 min moving average? Meaning if the 5 min moving average of volumes in a scrip is let’s say 10k. Is 500 shares a good number to trade safe? Or should it be less than that? I have always seen that the second I place an order with ALL technical aspects looking favourable, the share price will definitely move towards my SL than the target if the quantity I have put is too high.