Designing Risk

Financial markets allow you to design your own risk. Market is a vast pool of risk - return matrix. Investors can manufacture their own risk according to

1. The timeframes  ( IntraDay, Swing, Positional, Long Term, Short term)
2. Selection of Instruments ( Stocks, Futures and Options)
3. Position Size  ( small or large)
4. Type of strategies ( Long or Short or Pairs trading )
5. Diversification ( Across stocks, industries, asset classes like commodities and currencies)
6. Liquidity preferences

Stocks in Play 19th June 2010

As an intraday trader I want to be in stocks with volume and volatility. Trading gurus often emphasise stock selection. Some of my random observations are

1. Asian Markets not picking up weakness displayed in US. US futures mildly positive.
2. EVERONN : This is a stock in play. Board meeting today. Reports of stake buy by Nikhil Gandhi

         stock up 18% in 2 days. Everonn Business education a rehash of
        ICFAI NationalCollege ?    Everonn trades violently ahead of earnings as witnessed last  time    . I would like to choose my spots and reduce size and honor stops and try to avoid revenge and aggressive trading in the scrip. Previous Day High of 613 may be good resistance but beware of false breakouts. Stock is only in Cash segment that adds to lack of flexibility to express negative view. I would have to allow the market to show that it has made a top.

3. Other stocks likely to be in play : TCS, Cromgreaves, HDFC Bank, Sesagoa, CanBank, DCB, Escorts, PFC, Mindtree, Zylog Systems on Results meetings and as active securities for the previous day.