Short Term (ST): Between 3 days to 3 weeks
Intermediate Term (IMT): Above 3 weeks to 3 months
Medium Term (MT): 3 months to 9 months
Long Term (LT): Anything above 9 months

Short Term Target Means – Approximately 3 –4 weeks.

If the target is not met within 3-4 weeks then please exit the positions.

Please follow stop losses very strictly and do not take positions where one is uncomfortable with the stop loss level. Above all Buy or Sell the stock only when the risk - reward ratio vis-a-vis the stop loss is favorable for taking a position.

INTRA-DAY CALLS: Intra-day calls on stocks for buying or selling are purely for intra-day. We don't give targets for Intra-day calls. Trading Calls are jobbing trading calls for quick entry and exit.

INDICATIVE TARGET FOR INTRA-DAY CALLS: The indicative target can be calculated taking the absolute difference between the Buy price and Stop loss or Sell Price and Stop loss, and projecting by adding to the buy price or reducing from the sell price. Alternatively, target will be the difference, multiply this by 1.618 and add it to the buy price in case of a buy call and reduce from the sell price in case of a sell call.

Example
Buy Call- Buy X stock at Rs 100 SL 98.
Following will be the Target Calculation
Buy Price = 100
Stop loss = 98
Difference = 2
Target 1= Difference + Buy Price= 100+2= 102
Target 2 = (Difference X 1.618) + Buy Price = (2 X 1.618) +100= 103.20

Example
Sell Call- Sell X stock at Rs 100 SL 102
Following will be the Target Calculation
Sell Price= 100
Stop loss = 102
Difference = 2
Target 1= Sell Price -Difference= 100-2= 98
Target 2= Sell Price - (Difference X 1.618) = 100 - (2 X 1.618) = 96.80

VALIDITY OF THE INTRA-DAY CALLS: STOP LOSS OR INDICATIVE TARGET WHICH EVER IS ATTAINED EARLIER

TRADE QUICKLY AND TAKE PROFITS
Targets are indicative; traders must check the net cost and keep taking profits on long or short trades when the opportunity arises. It should not happen that at a point profits are seen and later you find stop loss getting violated.

DELIVERY CALLS
Targets and stop loss are given. Target and stop loss are wider. Therefore to take the benefit of the movement and target, investor will have to invest in low profile volumes as per one's risk bearing capacity. Larger the target, longer will be the period of holding. Time frame of targets cannot be defined. Therefore, investors must buy in low profile volumes and keep room to accumulate at lower levels whenever the opportunity arises. Investor's are advised to take profit as per convenience irrespective our targets. What matters is investor's profit?

POSITIONAL CALLS
Positional Calls are short-term calls and they can be carried forward.

RISK MANAGEMENT
Define the risk per trade. The loss should be limited to risk bearing capacity. Trading call recommendation can go right or wrong. The performance is dependent on market conditions on a particular day. Volatile and choppy market on intra-day can take off the stop loss. In this process a trader must not incur larger losses. If the risk per trade is defined then the loss will be limited to the risk defined.

Example
If a trader is willing to loose per trade Rs 1000/-. Then the recommendation is as follows:
Buy X stock at Rs 100 Stop loss Rs 98
Difference of buy price and stop loss = Rs 2/-
Amount Willing to Risk or Amount willing to loose per trade= Rs 1000/-
How much volumes to trade= Amount willing to loose divided by the Difference of buy price and stop loss= 1000/ 2= 500. The volume that a trader can trade in the recommendation is 500 shares.
In this case if the recommendation fails on account of stop loss violation the loss is restricted to Rs 1000.

DO NOT OVER COMMIT YOUR VOLUMES WHEN TRADING

Example
The loss bearing capacity is Rs 1000 but a trader has done volumes of 1000 shares. That means effectively, if the stop loss is violated then the loss, which a trader can incur, is Rs 2000/. This means the loss bearing capacity is Rs 1000 per trade and the risk undertaken is Rs 2000/-.

ALWAYS OBSERVE THE INDICATED STOP LOSS. FEED IT IN THE TRADING TERMINALS.

NEVER TAKE DELIVERY OF INTRA-DAY TRADE
It is possible that if the overall market gets into a corrective phase then the loss that you can incur by taking the intra-day trade into a delivery trade will be very heavy. Therefore, defining the risk per trade is very important.

FINANCIAL, PSYCHOLOGICAL AND MENTAL PREPARATION REMOVES THE FEAR OF LOOSING
When we define risk per trade, we become mentally, psychological and financially prepared to take the risk. You are also feeding the stop loss in the terminal and when executed, a trader is willing to take it. That means, a trader is removing the fear of losing. The moment, you have removed the fear of loosing then effective implementation of trade begins and a trader will be focused to implement the next trade.

SURVIVING EVERY DAY IS KEY FOR OVERALL TRADING SUCCESS
A trader needs to limit the losses and survive every day with limited loss. So, that he can bounce back the next day and make the most on the next favorable day. If you loose trading capital in short time or in one day then you are not giving yourself a chance to play the next day.

FOR TRADERS NET LEDGER - CREDIT OR DEBIT IS IMPORTANT
Trades will go right or wrong what matter is net position over a period of time, which reflects, in the net ledger. Wrong and right trades will keep happening. If the risk per trades are defined well then few wrong trades do not matter, as overall net positions should remain positive. Working in a methodical way helps to protect capital and maximize gains. Indirectly this keeps you mentally, physically and financially healthy.

WHEN ARE PROFIT MADE GENERALLY
Market has its up's and down's, not only on intra-day but on day to day basis, week to week basis, month to month basis, quarter to quarter basis and year to year basis.
When do people make money?
Money is made generally when the market rallies. On correction traders and short-term investors lose money. Traders are bruised on correction and when market rallies again they cannot come back strongly to participate. Traders in such situation miss the moves and come back on later stage of the rally, when it is another round of correction.
Defining risk per trade protects the trader from big losses in corrections and enables traders to come back in the next phase of the rising move.
Protecting loss in correction phase is key point for overall success in trading and short-term investment. Most of the traders get into bad habit like not observing stop loss; over trading and feeling left out in the rally only to take drastic buying decisions which are the reasons why the losses are witnessed heavy on correction. Most importantly not observing stop loss takes a heavy toll on capital in the event of correction and deeper correction.
Subsequently, traders start living in a hope that recovery could be seen in their respective positions. But invariably, that is not to be seen and losses get aggravated, to finally surrender at positions in losses. Trader get tired of carry positions, losses keep increasing, this builds a mental pressure to take wrong decisions on many occasions.

TRADE AS PER ONE'S OWN FUNDS AND DON'T TAKE OVER EXPOSURE LIMITS A trader has Rs 1 Lakh trading capital then generally broker gives 2 times or 3 times the exposure. Trade as per the amount of money you have. Taking multiple exposures means taking bigger risks and if trades go wrong then you have a deficit to be paid to the broker. So, in a way there is imbalance between the capital in hand and the risk a trader is actually taking.

CLUE HOW TO MANAGE TRADING CAPITAL First decide how much capital you have for trading.
Secondly decide in how much time you are willing to loose the allotted capital and accordingly calculate risk per day and how many trades are to be done daily.

Example-

1) Rs 1 Lakh trading capital
2) To loose in 2 months
3) That mean per month risk of Rs 50 thousand
4) It also means a risk of Rs 2500 per day
5) If we decide to do 3 trades in a day
6) Per trade risk will be around Rs 833.
7) At this point we assume that all day are not going to be wrong and you are unlikely to loose all trades every day.
8) A buy call: Buy X stock at Rs 100 SL Rs 2
9) In this trade effectively as per risk per trade, a trader can do 417 shares
10) Target a trader can calculate is 1 time the difference between the buy price and stop loss or 1.168 times.
11) In that case target will be Rs 102 and Rs 103.20
12) Effectively if the trade goes right the trader can earn Rs 2 or Rs 3.20
13) In terms of money- Rs 833 to Rs 1348 can be profit.
14) If the trades go wrong then the loss can be of Rs 833.
15) If all the 3 trades goes wrong then stop trading for the day
16) If all the 3 trades goes right then also stop trading
17) If a trader wants to continue trading then per trade risk will be pegged at Rs 833. Just because all the trades have gone right you should not increase the exposure and the risk per trade.

The above illustrated example is a step to throw light on how trading can get organized methodically. Recommendations are required but ultimately, how you can manage your trade and risk is important. Innumerable methods of risk management are available. The objective is to give another stream of thinking to traders so that they can plan the trading capital well and protect themselves from heavy losses when market offers sharp, sudden and drastic corrections.