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There are many ways of setting up a target when you have taken a position in markets.
This one is very simple and you can use it when you don’t have any other tools to identify target.If you buy a stock at Rs 100 and your stop loss is 98-simply your target will be 106 that is 3 times of your risk-Rs 2.
When you have taken a position lets say you bought Acc as shown in below chart.
Lets assume you bought near area where third click is written.
You got 3 swing points.One low,One high and one retracement low.
As shown in above image if you double click on the swing low and drag your fibonacci extension tool to swing high and than click recent retracement low you will get a 100% fibonacci extension level.
You can use this 100% level as your first competitive target. By competitive target i mean you should exit before other do or chances of missing your profits are there.
Use call option strike price having highest open interest as your first competitive target-as it might be your major reversal/resistance level.
Use put option strike price having highest open interest as your first competitive target-as it might be your major reversal/support level.
There are many other ways of identifying targets.
If you are interested for further knowledge and education in stock markets feel free to contact us.
You can visit our website at Financial Market Education-Trade/Invest In Financial Assets
You can view here -our advanced stock market course module.
There are many ways of setting up a target when you have taken a position in markets.
1.Using 1:3 risk to reward as your target.
This one is very simple and you can use it when you don’t have any other tools to identify target.If you buy a stock at Rs 100 and your stop loss is 98-simply your target will be 106 that is 3 times of your risk-Rs 2.
2.Target identification using fibonacci extension
When you have taken a position lets say you bought Acc as shown in below chart.
Lets assume you bought near area where third click is written.
You got 3 swing points.One low,One high and one retracement low.
As shown in above image if you double click on the swing low and drag your fibonacci extension tool to swing high and than click recent retracement low you will get a 100% fibonacci extension level.
You can use this 100% level as your first competitive target. By competitive target i mean you should exit before other do or chances of missing your profits are there.
3.You can use option chain open interest to determine your targets.
Use call option strike price having highest open interest as your first competitive target-as it might be your major reversal/resistance level.
Use put option strike price having highest open interest as your first competitive target-as it might be your major reversal/support level.
There are many other ways of identifying targets.
If you are interested for further knowledge and education in stock markets feel free to contact us.
You can visit our website at Financial Market Education-Trade/Invest In Financial Assets
You can view here -our advanced stock market course module.
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