Podcast
Questions and Answers
With a total capital of ₹1 Lakh, how much capital is allocated for trading based on the provided risk management strategy?
With a total capital of ₹1 Lakh, how much capital is allocated for trading based on the provided risk management strategy?
- ₹50,000 (correct)
- ₹25,000
- ₹1,00,000
- ₹75,000
If the daily loss limit is 2% of the trading capital, what is the maximum amount that can be lost in a single day based on the provided data?
If the daily loss limit is 2% of the trading capital, what is the maximum amount that can be lost in a single day based on the provided data?
- ₹1,500
- ₹2,000
- ₹1,000 (correct)
- ₹500
Given a risk/reward ratio of 1:3, and a stop-loss of 10 points, what is the target profit in points?
Given a risk/reward ratio of 1:3, and a stop-loss of 10 points, what is the target profit in points?
- 10 points
- 20 points
- 40 points
- 30 points (correct)
Following the provided strategy, if the daily loss per trade is 10 points and the maximum daily loss is ₹1000, what quantity of contracts should be traded?
Following the provided strategy, if the daily loss per trade is 10 points and the maximum daily loss is ₹1000, what quantity of contracts should be traded?
Over 30 trading days, if there were 15 days of losses totalling ₹15,000 and 15 days of profits totalling ₹45,000 what was the total return on the ₹1 lakh capital?
Over 30 trading days, if there were 15 days of losses totalling ₹15,000 and 15 days of profits totalling ₹45,000 what was the total return on the ₹1 lakh capital?
Flashcards
Risk Capital
Risk Capital
The amount of money you are willing to risk on each trade, calculated as a percentage of your total capital.
Daily Loss
Daily Loss
The maximum amount of money you are willing to lose on a single trade.
Risk/Reward Ratio
Risk/Reward Ratio
The amount of money you lose on a losing trade compared to the amount of money you make on a winning trade.
Position Sizing
Position Sizing
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Stop Loss
Stop Loss
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Study Notes
Risk Management Strategy
- Total Capital: ₹1 Lakh
- Trading Capital: 50% of ₹1 Lakh = ₹50,000
- Backup Capital: ₹50,000
- Daily Loss Limit: 2% of ₹50,000 = ₹1,000
- Position Sizing: Daily Loss = Quantity / 10
- Stop Loss: Used to prevent larger losses
- Risk/Reward Ratio: 1:3 (Loss = 10 Points, Profit = 30 Points)
- 30-Day Performance: Potential loss in 15 days = ₹15,000; Potential profit in 15 days = ₹45,000; 30% return
Financial Performance (Hypothetical)
- 15-Day Loss: ₹15,000
- 15-Day Profit: ₹45,000
- 15-Day Return: ₹30,000 (30% of ₹100,000 total capital)
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