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Before buying a stock, you should have your stop-loss (SL) and target already decided. Let me explain with an example: suppose I bought HDFC Bank at 1615, thinking I would place my stop-loss at 1520 and my target between 1950-2000. However, what happened was that HDFC Bank went up to 1788, about 173 points above my buying price, but then it started coming down and approached my buying price again. At that point, I didn’t book my profit. So, should I exit in panic? No, at that moment, I should remember what my plan was before buying the stock. The risk-reward ratio I had decided on was 1:4, meaning that even if I incur a loss, it will be within my planned risk. So, I shouldn’t panic; I should stick to the plan. This way, while maintaining the risk-reward ratio, I should trade because if even 2 out of 4 trades are successful, they will give me good profits according to my risk-reward ratio. And I still have hope that HDFC will reach the target. #hdfcbank #HdfcBank #StockMarket #stockmarketsindia #niftycrash