Which one is better trading style , aggresive or conservative ?

ajay.kwal's picture

You are trader and sometime wins the trade and other time loose it , big question in your mind .. what is best trading style. There has been recommendations like being aggressive or being conservative.

After all, the most seasoned trading veterans will tell you the best aggressive traders know when to be conservative and the best conservative traders know when to increase their risk and get aggressive. There's nothing wrong with either style, so let's highlight some of the things you need to know about risk as it pertains to trading.

No Need To Always Hit A Sixer :

We all want to be rich and become rich fast.That's where most mistakes are being made in trading world. These newbies risk a fair amount of their bank balance on a single trade hoping this will be the trade that delivers a new Ferrari or a home in malabar hills.This is absolutely the wrong way to approach trading. Over the course of your trading, you are going to encounter trades that, in cricket terms, are just singles. They're winners, but there was no signal to back up the bus and risk more than usual on that particular trade.

Understand the Risk Before You Trade:

The key to being a solid, conservative trader, not an overly reckless, aggressive trader, is knowing your risk BEFORE you put the trade on. Aggressive traders that lack discipline will throw the same share size or amount at every trade with no thought to the consequences. The conservative trader says 'I have got Rs 1 lakh in my account, therefore I'm willing to accept a loss of two percent or less on this next trade.” Other conservative traders may set a stop loss order for 1 Rs (or another arbitrary amount) and if their stop gets taken out, they're fine with that because they didn't lose a lot of money.

When Do You Get Aggressive? Or in other words when to bet big

It depends on time to time and person to person.After trading for few months and winning some small trades You now have some confidence and some cushioning to absorb a large loss and you want to try to milk a trade for more money than you have previously.

So ..how do find those moments ?

Make sure the technical indicators you use are confirming the emergence of a strong trend. If you're going to increase your risk, you want to be on the right side of the trend. For example, let's say you're trading stocks and the market has been up all day. There's about two hours left in the trading day and you've been watching Zee Tele inch its way up all day. The sellers have been weak and then you see a fresh wave of buying come along with increased volume. This is an ideal setup for you to put on aggressive long trade. The stock is strong, the market's strong and the odds are on your side. This would be a “smart-aggressive” play.


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