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Stock Market Strategy

 

Do you wish to earn huge returns by investing less that too in minimum time? Is this really possible? Yes, it is. India’s most popular and successful investor & trader, Mr. Rakesh J describes the turning point in his life. It was one such day when he earned around Rs. 20 crores by investing Rs. 2 crores in just a single day. How did he do that? What is this strategy using which even we can earn such good returns? This strategy is known as an Event-based trading strategy.

 

What is this Event based trading strategy? Let’s find out. 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. 

 

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 invest accordingly in the direction the market is moving in, then we can get good returns by investing during such times.

 

In the year 1989-90, when the Budget was being declared by Mr. Madhu Dandavte, Mr. Rakesh J at that time had invested Rs. 2 crores and had earned close to Rs. 20 crores in a single day.

 

So, for event-based trading, we predict in advance the occurrence of such events or situations that will take place in the country and which will significantly impact the share market such as Budget, Election Results, etc. Hence, if we invest accordingly in the direction the market is moving in, then we can get good returns by investing during such times.

 

Let us understand this with the help of an example and a case study. In the year 2014, when the Election results were about to be declared and the nation was awaiting a completely new political shift and the phrase, “Ab ki Baar, Modi Sarkar” had spread wide across, at that time it was being sensed that there would be a strong movement in share market.

 

On the 12th of May, 2014 we had published an article in the famous Maharashtra daily newspaper ‘Pudhaari’. The article was titled ‘Jackpot’. We had predicted that the market will witness a bullish opening.

 

So, those people who traded in the share market accordingly, on the 15th of May, 2014 as per the guidelines mentioned in the article; gained good returns on their investment on the 16th of May, 2014; in just One Day. Similarly, we too had invested using limited risk in the market and gained good returns on it; the next day itself.

 

In the year 2019, when the Budget was being declared, the market was witnessing a negative momentum. Here as well we accurately predicted the negative sentiment of the market and traded bearishly and thus, earned good returns too.

 

If you too wish to earn good returns using this event-based trading strategy, how to do it? Let us understand it in a step by step manner:

 

The first step is to identify such an event whose occurrence will have a strong impact on the movement of the market. So, if before the occurrence of the event, the stock market is predicted to be going in the direction of being bullish then you need to trade bullish using limited risk. In this way, you can earn good returns.

 

Similarly, if the market is predicted to go bearish, then one can trade bearish and still earn good returns. Thus, 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.

 

In Event-based trading, if our prediction works, we can earn huge returns but if our prediction goes wrong, we’ll have to bear a huge loss as well. So, in event-based trading, if you wish to increase your profits and limit your losses, then you should probably trade in the Options market.

 

What is this Option market? Let us understand it with a simple example. If we purchase a lottery ticket of Rs. 100 having prize money of Rs. 1 crore and even if don’t win the lottery bet, we’ll face a loss of Rs. 100 only but if we win the bet, we can win prize money anywhere from Rs. 10,000 to Rs. 1 crore. And if we face a loss here, it will be very less if compared to the profit that we can earn here. This same thing takes place in the Options market in the share market.

 

Now, if you wish to know more about what are Options, What is Call / Put?  What are Derivatives? What are Futures? All these topics are covered in detail in our Gateway to Wealth program in the app ‘Aryaamoney.’ 

 

In the Futures & Options market, we can earn good returns by investing less but that doesn’t mean we should go and trade there every time as the risk is also involved here. If we go and trade in futures and options all the time, then there will come a point when we’ll neither have a future nor have any option in life.

 

The Smart Investors carry-out the Event-based trade only when there is an event in the market.  If there is no such event, then one should avoid carrying out such trades. Be it Event-based trading or Swing trading, all such concepts are explained in detail in our Smart Investor training program in our app. Do subscribe to it.

 

If you wish to earn good returns by carrying-out Event-based trading then one thing that should be noted is that there is scope to earn good returns but at the same time, even risk is involved there as well. Hence, if you can afford to take such a risk or you have previously made profits, only then should you go for such event-based trading. As said earlier, if we go and trade in futures and options all the time, then there will come a point when we’ll neither have a future nor have any option in life.

 

Until next time…

 

Happy Trading, Happy Investing!!!

 

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https://www.youtube.com/watch?v=KOqXUVaTMQw

 

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