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6:22-23 - "The lamp of the body is the eye. If your eye is sound, your whole body will be full of light. But if your eye is evil, your whole body will be full of darkness. If all the light you have is darkness, it is dark indeed!"

19 Dec 2017


Hi Friends:   The dark secret of the modern stock market.    -    Back to the beginning and the smart looking strategies how to beat the market:  Will they not allow you to make money in the stock market?  The sad answer is, the private investors and their professional helpers are essentially fighting for a positive piece of a negative cake.  The odds are against the investor.  Planning the exit of all positions and selling regularly, in other words becoming a trader, would improve his situation.  Of course, this is not easy, either.  You are still facing the competition of the market maker and his many dirty tricks.  He has the advantage and you and other traders are still trying to eat a negative cake.  To overcome this tough environment a trading method or system is necessary.  Don’t expect to be able to fend off the systematic advantages of others with impulsive decisions.  Moreover, you have to have an edge.  At least some elements must set your trading apart from what others do.  The market constantly adapts itself to the wisdom of the crowd.  A working system has to meander around the various traps of the market and still center around a real imbalance and exploit it.  Traps and imbalances are hidden.  If they were obvious for everyone they wouldn’t exist.

From my experience I practiced a trading method, it is furnished below for your knowledge and followup action.  Select one or two good shares for your trade.  It is not a Day trade or long term investment.  This is hold and sell and  hold and sell method.  In the present market condition, market is always side way movements.  Even a day you experience, share going up at the same time it may go down also.  Therefore selection of share is very important.  I have selected IL&FS Investment Managers Ltd.  It is a debt free company.  Its dividend yield per year is 7.23% for the last 5 years.  Its present price down side is limited.  Suppose if you are not selling the shares and keeping it in your portfolio, you can earn dividend yield of 7.23%.  My trading method is like this.  Purchased price Rs.17.35.  Present rate is Rs.16.40.  Daily trading volume is 2,00,000/- to 3,00,000/-.  Holding 5000 shares.  Daily difference in share price is between 16.40 – 17.20.  At 10 A.M. I watch the counter,if it shows green signal – above +30 ps.  I buy 1000 shares in addition to my holding.  When at 2.30 P.M. – 3 P.M. if the price of share  comes to Rs.17.05, I sell 1000. After that I watch the market for 10 to 20 minutes, then if the price shows decrease signal to 16.90, I sell 5000 my holding.  At 3. O Clock  share price  shows 16.50,  I put my buy  order for 5000 @ 16.40.

 If it is not bought till 3.15 P.M., I cover the position at 16.50.  So your holding is safe with your hand.  This day’s total profit will be 16.75 x 1000 -17.05 x 1000   =  16,750 –17050   = Rs.300/- minus Commission Rs.30  =  Rs.270.   Again  5000x16.90 = 84500 minus  5000x16.50  = 82,500 = + 2000 minus Commission Rs.50/-  =  1950.  Total one day  270 + 1950  = 2220 profit.  No cash paid.  Your holding is safe  with you.  You can daily do business like this.  If suppose your selling price is going  up,  immediately  cover the position.  In my case I am selling the scrip and trading for the last three months.  Share selection is very important. Normally  Institutions or FIS are not interested in small cap shares.  Therefore, You may also find out a trading method.  Hold and sell and Hold and sell method is good for day traders.  Daily speculative trading commission is less @ Rs.0.012%.  But delivery commission is higher ranging from 0.50% to 0.90%.

Good Luck.                                            See you later.

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