This is true at multiple small profits can lead to disproportionate compounding profits, but the problem lies in probability. One will have to be right in large number of trades within a short duration for this to work. The capital will reduce even on break even on trade due to tax and charges.
If the profit target is 10 to 20%, stop loss would be 5% to 10% for a 2:1 risk reward ratio. A stock can fall 10% on any day with unknown reasons. This volatility will ensure that stop loss hits frequently.
For buy and hold investor, few trades with large target is required and time duration for the target to be achieved is also long. This has higher probability of achievement.
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