1. I here by post a formula which lets you determine the number of shares which should be purchased as per your capital availability and risk profile:
Number of Shares=((Cash+Holdings)xMaximum Risk Percentage per trade)/(Entry Price of Trade-Predetermined Stoploss or Exit Price)
2. Say total cash holding=1 lakh
Max Risk%=5%
Entry Price=55
Stop Loss=50
Thus number of Shares to be traded=100000x5/((55-50)x100)=1000 SHARES
Number of Shares=((Cash+Holdings)xMaximum Risk Percentage per trade)/(Entry Price of Trade-Predetermined Stoploss or Exit Price)
2. Say total cash holding=1 lakh
Max Risk%=5%
Entry Price=55
Stop Loss=50
Thus number of Shares to be traded=100000x5/((55-50)x100)=1000 SHARES
