Stock market risk calculator and position size calculator

Stock market risk calculator and position size calculator

Understand what is Risk 

Many people consider the stock market little more than gambling casinos. Today we explain what risk management is important and how to make decisions. The best decisions are made when we quantify numbers, determined the pattern of the past, and believe in an uncertain future. but the problem arises when how much people believed that the past will drive the future.
we cannot predict what will happen in the future because it is not predictable but if we use numbers and find out what happened in the past we are able to make future decisions based on numbers rather than on assumptions. why the skill of risk management is such a high-value skill? why we are trying to understand and measure the risk today? Gambling is very addictive because it put you face to face with your fates. 

we play this game because we believe that we have very good luck. Many people believe that the stock market is like a gambling casino. Is making money in the stock market is the result of skill combined with luck or it is just luck?

If everything depends on luck then risk management is useless. When we say he was unlucky we free the person from the mistake he had done in the past which lead to unhappy outcomes. When we say he was lucky we deny the person's efforts which led to the happy outcome.

Stock market risk management

The stock market is known as a high-risk investment and high return investment without a position sizing calculator you will lose all your gains within a day. Risk management is very important because if you don't manage your risk it will wipe out your trading account. If your risk management is good you can earn money in the stock market.

If your success rate is 60% and risk-reward is 1:1 you will 2 % after deducting your brokerage. If your risk-reward and position size are calculated and you manage 1:2 risk-reward you will find that your portfolio grows even with a 50% success rate.

This excel sheet will help you to estimate the target based upon the risk-reward ration and find the position size of your trade based upon the capital you have. 

Procedure to calculate the Risk reward and Position size 

Purchase the excel sheet from this link 

1. Open the Stock market risk-reward calculation excel sheet
2. Enter the total capital you have in your account
3. Enter the brokerage cost per trade from your broker
4. This file calculates both buying and selling risk and reward  and position size
5. For buying enter the risk and reward ratio greater than 2 in the risk-reward column
6. Enter the buying price of the stock - after confirming the breakout in the stock
7. Find the support level of the stock and enter the value
8. Click on the calculate exit range button on excel
9. Click the max position size button on excel
10. You will find the position size based upon your total capital
11. Repeat the process for short selling stocks
12. Implied Volatility and Nifty 50 correlation?
13. Nifty 50 - Why Option Chain Analysis fails?
14. Option Chain Probability - Implied Volatility Excel Sheet

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