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Men said,
You said that there is a possibility of nifty coming to 4k and u also said that investors should hold on their blue chip stocks, if the index had to fall it would be these index stocks which would fall.
My Notes:
On ET-Now, and in the ET-Now Investor Camp (broadcast Live), Nikon has asked this question: What is the worst case scenario for the Nifty? My answer was: It is possible for the Nifty to reach 4000. This is a probability, NOT a certainty.
I also suggest holding on to your blue chip stocks. Why? Because, some part of our portfolio should always be devoted to equity. This portion is invested in shares, irrespective of market conditions. We do not trade in this portion, meaning, we do not buy and sell it according to market cycles. We suffer through the inevitable bear cycles (like now) and also gain from the long term bullishness of the market.
Back-testing a Method
Nirav said;
I want to ask you about trading method/system.
- Period of back test.
- Type of market for the back test.
- Duration of using that method.
My Notes:
The period of back test should be according to the type of trading. If you are a short term trader then the period should be 5-6 months, and if you are a long term trader then the period should be at least 2 years.
Type of market depends on which type of market you trading. If you trading in a bullish market and taking a back test result from a bearish market then it is worthless. You want to select a market that has been different types of price action – up, down and sideways. Stocks/Futures that trend well are suitable candidates for back testing.
All mechanical systems degrade, go through long periods of disharmony with actual markets. This fact should be kept in mind while back testing, since the future remains unknown.