"Cut your losses, let your profits run."
That is the main philosophy on which I run my weekly trades. And no other strategy is better suited for this philosophy than the "Reverse Scale Strategy". Please follow the link to read on the original method.
However, what I'm going to do in this blog is an adaptation of the above strategy where I will be buying stocks that have recently hit a new 52-week high list.
Without beating around the bush any longer, let me dive right into the strategy.
PART 1: Stock Picking
Step 1: Go to the 52-week high list in NSE Website
Step 2: Select only those stocks which are part of the F&O stocks list(select FO stocks in the dropdown list)
PART 2: Entry
After selecting the stocks all one has to do is buy the shortlisted stocks for a fixed amount of money.
In this blog, it shall always be for 5000 rupees regardless of the price of the stock(if the price of the stock is above 5000 rupees we shall skip buying that stock altogether).
PART 3: Management
The trade management is to simply follow the "Reverse Scale Strategy".
Exit the stock if the price of the stock drops by 50% of the buying price.
Invest an additional 5000 rupees if the price of the stock increases by 50% of the buying price.
Keeping buying more every time the stock goes up by 50% of the previous buy price.
To conclude, I shall follow the above method every week and track the progress of the said portfolio here in this blog.
Hoping for the best.
That is the main philosophy on which I run my weekly trades. And no other strategy is better suited for this philosophy than the "Reverse Scale Strategy". Please follow the link to read on the original method.
However, what I'm going to do in this blog is an adaptation of the above strategy where I will be buying stocks that have recently hit a new 52-week high list.
Without beating around the bush any longer, let me dive right into the strategy.
PART 1: Stock Picking
Step 1: Go to the 52-week high list in NSE Website
PART 2: Entry
After selecting the stocks all one has to do is buy the shortlisted stocks for a fixed amount of money.
In this blog, it shall always be for 5000 rupees regardless of the price of the stock(if the price of the stock is above 5000 rupees we shall skip buying that stock altogether).
PART 3: Management
The trade management is to simply follow the "Reverse Scale Strategy".
Exit the stock if the price of the stock drops by 50% of the buying price.
Invest an additional 5000 rupees if the price of the stock increases by 50% of the buying price.
Keeping buying more every time the stock goes up by 50% of the previous buy price.
To conclude, I shall follow the above method every week and track the progress of the said portfolio here in this blog.
Hoping for the best.
That's a real risky strategy bro
ReplyDeleteNot exactly, we have defined our risk at 50% of purchase price so our maximum risk is known while the strategy has potential for unlimited returns(since stocks which is trending has a tendency to continue to trend for a long time). So while on the basis of risk alone even if it looks like a lot of risk, when looked at the risk to reward ratio, this strategy looks very rewarding.
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