JUN 3, 2020 By : ATHUL RAJEEV, VENTESKRAFT.
In order to find the net profit or loss of your stock holding. You will have to determine the difference between what you paid for it. And ultimately what you sold it for on a percentage basis. Establishing where to get out before a trade even takes place allows a risk ratio to be calculated on the trade. Just as important as the profit target is the stop loss. The stop-loss determines the potential loss on a trade, while the profit target determines the potential profit. Ideally, the reward potential should outweigh the risk.
A profit and loss (P&L) statement is a financial report that provides a summary of a company’s revenue, expenses and profit. It gives investors and other interested parties an insight into how a company is operating and whether it has the ability to generate a profit.
Where to Place a Profit Target
Placing a profit target is like a balancing act you want to extract as much profit potential. As possible based on the tendencies of the market you are trading. But you can’t get too greedy otherwise the price is unlikely to reach your target. So you don’t want it too close, or too far. So it’s very important with the market order that your profit target is placed at.
Let’s say, by trade, before a previous swing high or below the next round number. You don’t want to be sort of trying to have your profit target through the pivot point.So you always want to bring your profit target for a buy trade on a hour chart or lower below the next likely stalling point, the next resistance level.
Market is always right and above you.Once you are ready with the knowledge and use the money you can loose for trading. Trade in small amount to understand how market moves and how it behaves. Try some simple strategies that you can understand and do not complicate with number of indicators. Simple is always effective. Once you are comfortable and able to make profit with your strategy consistently.
