RupeeCase
Education . Stop discipline . 1 of 3
The math that makes a 10 percent stop expensive
A 10 percent trailing stop exits you 4 to 6 times a year. The stock did not go bad. Your stop did.
Most retail stops are placed in feeling, not in volatility math. The math says a stop set just below your peak gets hit during normal weather. Not a crash. Just normal weather.
5
Natural drawdowns of 10 pct or more in a typical year on a NIFTY 50 mid-cap name
28
Median trading days for that stock to recover to its prior peak
1.5
Percent annual drag from 5 forced exit and rebuy round trips. Before timing miss
Numbers are the central tendency for a NIFTY 50 mid-cap stock across a full calendar year. Universe . any stock with average daily range near 1 percent and trend intact. Method . count peak-to-trough moves of 10 pct or more that recovered within 60 trading days.