Greaves Cotton Ltd - A Case Study
Greaves Cotton Ltd (NSE:GREAVESCOT) gave a breakout on January 07, 2022. The entry price was 174.90. Within 2 weeks, the stock made a high of 258.90, (gain of 48% from entry price). However, in next 6 weeks, the stock corrected and went below the entry price. So all these gains of 48% were wiped out. Although stop loss was a little far, however, the stock moved below entry price and most of traders found themselves in pain.
You can find the charts here:
No one can guess where the stock will move in coming days/weeks.. The best way is to manage the trades we are in.
What traders could have done differently to earn profit in this trade:
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One can move his/her trailing stop loss to cost once the trade is in your direction (say 15-20%). Also, can book partially (say 25% of your position size at this gain). This may look weird to some traders; however traders may use this strategy to protect their capital and profits.
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Previous charts do help us in creating strategies that are important to beat the market. One can formulate his/her own strategies and can share with fellow trades if don't think otherwise.
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