iCharts Discussions

[HARSHAD]

Investing in a bulk will give bulky profits if and only if u know tech analysis well otherwise most of the time we have to come out bleeding .
To avoid bleeding and then wait for healing....... invest in stocks in pyramid style.
exmple :
take any stock for conviniance i took BOI
Investment : 300 shares worth rs 1 lac
start pyramid with only 10
10,20,40,80,160 shares
invest in 4 to 5 percent fallll each time stock falls
if continuously 5 days stock falls our whole qty will b invested.
350*10= 3500
335*20= 6700
322*40=12880
310*80=24800
total 150 qty invested of worth rs 47880/-
but if one observes carefully advantage of less shares at top and more at bottom breakeven of whole qty. comes at lower side.
in this example 150 shares breakeven comes at 319.20 above this price whole 150 qty comes in profit.
Thank you.

[amitkbaid1008]

Harshad

Pyramid style of investing will give more returns if one pyramid on the basis of amount and not on the basis of quantity as you have done. Also pyramid should be made only after a certain pre decided downward movement in price and not on every down tick

Say if the same scrip you have selected

Trade 1 Buy 10 @ 350=3500
Trade 2 Buy 21 @ 332.50=6982.50 (5% down tick)
Trade 3 Buy 44 @ 315.75=13893 (another 5% down tick)
As next 5% down tick not shown by you I am not initiating trade 4

Now your total investment is just Rs. 24375.50 about 50% lesser than what you have invested as per you strategy. This will help you protect your capital for further down ticks if that happens and keep you stay in the market even after a greater down ward movement.

Further your average price is around 325 which is higher than your average price. But if potential next trade @ 300 was also happened then
you have exhausted almost all of your capital since you have invested Rs. 95880 but as per this strategy you have invested Rs. 52276 with not much difference in average price i.e. Rs. 309 as per you and Rs. 311 as per above pyramid

But still your strategy is better in one aspect as you hold more quantity if case of bounce back just after you exhaust your capital you will make more money.

[hermish9999]

amit is right as these is called average ratio in the name of pyramid. nothing differ.


He$H...