Event-based trading which is also known as Jackpot Trading. Using this trading strategy you can earn good returns in less amount of time using less investment.
An event is a thing that happens or takes place, especially one that holds a lot of importance. So for carrying out Event-based Trading, one must predict in advance such an event, after the occurrence of which there will be a huge impact on the share market.
Our SEBI Registered Investment Advisor, Mr. Bhuushan Godbole suggests that if we predict in advance the occurrence of any such events or situations that will take place in the country and which will significantly impact the share market, and we invest accordingly in the direction the market is moving in, then we can get good returns by investing during such times.
The question here is how can we get good returns? So if we invest well before such an event takes place, by consciously predicting and analyzing the risks and returns and then trade using limited risks; we can gain a good profit.
In the year 1989-90, in the Indian share market scenario, a common man predicted one such incident. He by investing Rs. 2 crores, earned Rs. 20 crores within a period of just 2 hours. Do you know who that man was? What was that incident? So his name is Mr. Rakesh Jhunjhunwala and that event was Budget presented by Mr. Madhu Dandavte.
How do we carry out this Event based Trading? Let us understand this using the following two steps.
Firstly, we need to predict the occurrence of such an event which will highly impact the share market.
Secondly, Technical Analysis. It is the analysis of the market chart which shows the trend of the share market, the direction in which the share market is moving.
So if before the occurrence of the event, the stock market is predicted to be going in the direction of being bullish, here bullish means uptrend then you need to trade bullish using limited risk. Now, trading bullish means investing in such shares which show an uptrend i.e. such shares whose price will increase in the future. Because during the occurrence of that event if the market goes highly bullish then you can get excellent returns.
Similarly, if the market is predicted to go bearish or downtrend then one can trade bearish and still earn good returns. Trading bearish here means; as the market is going down, you can make money by trading into shares whose price is going down too. So even if the market goes bearish during the occurrence of the event, you can earn good returns within a short span of time by trading bearish using limited risk investments.
We’ll understand this strategy in detail along with two examples in our upcoming blog. Till then…
Happy Trading, Happy Investing!!!
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