Q. What Is WWW.INVESYS.IN?
WWW.INVESYS.IN Is A Website Dedicated To Providing Investment Research Service For Traders And Investors Trading On Indian / US Stock & Commodities Market. Using Our Proprietary Research System Based On Technical Analysis Of Market Trends, We Identify The Price Patterns Which Are Likely To Give Sustained One Directional Movement In Near Future. After Identifying The Price Pattern, We Analyse Precise Entry Price, Initial Stop Loss And Targets For Exit. We Provide Research To Our Clients Through Email Newsletter & SMS.
Q. Who Should Subscribe To WWW. INVESYS.IN Services?
WWW.INVESYS.IN Provides Investment Solutions To 3 Classes Of Market Participants. A. High Risk Traders: - These Kind Of Traders Are Willing To Take High Risk To Capture Very Short Term Movements And Willing To Take Leveraged Positions Much Larger Than Their Capital. Also, They Want To Profit From Rising As Well As Falling Market. Trading Commodity Futures And Short Term Stock Trading Is Suitable For Them. B. Medium Risk Traders: - These Traders Are Willing To Hold Positions For Few Weeks To Months For Good Returns But They Don’t Want To Leverage Their Capital. They Want Balance Between Risk And Reward. Also, They Want To Participate Only During Rising Market. Medium And Long Term Stock Investments Is Suitable For Them. C. Low Risk Investors: - These Investors Are Buy And Forget Kind Of Investors. They Want To Buy When Stocks Are Very Cheap And Likely To Rise Multifold Over Next Few Months Or Years. They Are Not Concerned About Daily Or Weekly Fluctuations Of Market And They Are Willing To Hold Stock During Intermediate Corrections. Long Term Stock Investments Are Suitable For Them.
Q. I Am Interested In Stock Trading But Why Should I Subscribe To WWW.INVESYS.IN?
Making Money From Markets Looks Very Simple As You Have To Just Buy Low And Sell High To Make Profits. However, There Are No Rules To Market Movement. You Have To Create Your Own Rules For Investment And Most Important, You Need Discipline To Adhere To Those Rules. However, Basic Human Emotions Of Hope, Greed And Fear Make It Very Difficult For Investors To Invest With Discipline. Soon, Investors Learn That It Requires KNOWLEDGE, EXPERIENCE And SYSTEM To Invest Successfully. However, By This Time, Investor Is Either Too Frustrated To Invest In Markets Or He Loses His Complete Capital. By Subscribing To Our Service, You Can Benefit From Our Systematic Investment Process, Knowledge& Experience Of Many Years. By Using Our Precise Entry Price, Strict Risk Management And Correct Positions Sizing, You Can Be Sure To Be Successful While Ensuring Growth Of Your Capital.
Q. Can Your Service Give Me Assured Profits?
In Markets, Nothing Is Assured. Neither The Price Movement Nor The Profits. However, Through Our Robust Investment Principles, We Can Assure You That If You Implement Our Research Strictly, You Will Come Out On Top And Success Will Follow You Over A Period Of Time. Implementing Our Research Involves Entering At Exact Price Point, Always Keeping Stop Loss And Exiting With Small Losses If Stop Loss Is Triggered.
Q. Do You Invest Based On Your Own Research?
Our Investment System Is Rigorously Tested And We Know It Works In The Market. We Have Been Trading/ Investing Based On Our Own Research Since 2005, Though Not Necessarily In The Same Markets About Which We Provide Research To Our Clients. Whenever We Have Conflict Of Interest In Our Own Investment And Our Research, We Always Follow Strict Disclosure Process And Let Our Clients Know About Our Own Positions.
Q. Why Have You Started Investment Research Service?
Stock Markets Are As Old As 16th Century. Although Technology Has Developed Tremendously Since Then And Investors Now Have Exposure To Vast Information, Still 90% Of Investors Lose Money In Markets. The Simple Reason Is That Basic Human Emotions Of Hope, Greed And Fear Have Not Changed Since Centuries. These Emotions Remain A Roadblock In Investor’s Quest For Acquiring Market Knowledge To Make Profits. They Still Commit Same Basic Mistakes Due To Lack Of Knowledge And Lose Their Hard Earned Money In Markets. We Hope To Make These Investors Prosperous Through Our Knowledge And Experience. It Is Our Vision To See Stock Market Profits Distributed Evenly Among All Investors And Not Remain Concentrated In The Hands Of Few Rich And Knowledgeable Investors.
Q. What Is Stop Loss And Why Should I Use It?
Stop Loss Is An Order To Close Your Trade, Profitably Or Unprofitably, If Market Goes To Certain Predetermined Price During The Day. For Example, You Buy Shares Of XYZ Company At Rs 200 Per Share. Our Research Suggests Keeping A Stop Loss Of 195. It Means That After You Buy Shares At Rs 200, If Share Price Falls To Rs 195 Anytime In Future, You Should Sell Your Stock And Take A Loss Of 5 Rs Per Share (200 -195).
We Categorize Stop Loss In Two Classes:
You Should Use Stop Loss For 2 Reasons.
Q. What Is Risk Management And Positions Sizing?
We Define Risk Management As Simply Managing The Risk On Open Positions Using Proper Stop Loss, So That During Adverse Market Movements, Positions Are Closed With Minimum Loss In Losing Trade Or Most Of The Profit Is Captured In Winning Trade. Position Sizing Tells You How Much You Should Invest In One Particular Investment. There Are Many Methods Available For Position Sizing. However, We Prefer The “Fixed % Of Equity” Method For Position Sizing. Let’s Take An Example. You Have Rs 100000 In Your Account And You Don’t Want To Risk More Than 3% I.E. Rs 3000 At Any Point Of Time. Suppose You Get A Buy Signal For 3 Different Securities X, Y, Z On A Day And Each Involves Setting Of Initial Stop Loss Of 5% From Its Purchase Price. How Much Of Each Stock You Should Buy? Since Acceptable Risk On Total Account Is Rs 3000 And You Have Three Trades X,Y, Z Available For Trading, You Should Risk Rs 1000 (3000/3) For Initial Stop Loss Of Each Stock. And Since Initial Stop Loss For Each Scrip Is 5% Below Purchase Price, We Should Invest Rs 20000 (Rs 1000 / 5%) On Each Scrip. This Way, You Will Invest 60000 Rs Out Of 100000 Rs Available, So That You Don’t Risk More Than 3% Of Your Total Account.
Q. What Is Drawdown? How Does It Affect My INVESTMENT?
There Are Period During Trading When No Matter How Hard You Try, You Get Losing Trades In A Row Before You Find A Profitable Trade. It Happens Frequently With All Traders And Investors. The Reduction In Your Account Size During This Losing Period Is Termed As Drawdown. For Example, You Have Rs 500000 In Your Account And During Next 10 Trades, You Lose On Every Trade After Which You Are Left With Rs 400000. Now, Your Drawdown Is Rs 100000 Or 20%. As The % Drawdown Increase, It Becomes Harder To Get Back To Your Original Account Size. Look At The Following Table To Gain Clear Understanding.
|DRAWDOWN||GAIN TO RECOVERY|
You Can See That Beyond 60% Drawdown, You Require Huge, Improbable Gains In Order To Just Get Back To Original Account Size. Hence, Drawdown Should Always Be Limited To Small Amount By Stringent Risk Management And Position Sizing.
Q. Should I Average My Purchase Price? If Yes, When?
We strongly believe in averaging the position which is in profit, not the position which is in loss. We advice to average up your position to take benefit of larger position size. Let’s take an example: - you buy 100 shares of Havells at 700 Rs as per advice. You place a stop loss at Rs 680 and target is 900. Case1: Havells share price start drifting down next day and hits stop loss of Rs 680. What should you do? Do you buy more shares to average the purchase price or do you close position? It’s in your best interest to close the position immediately once stop loss is hit. If you are tempted to average losing position instead of closing position as per stop loss, you are throwing good money after the bad. You won’t make profits in long run by averaging the loosing position. Averaging losses is like speeding the car when you are certain to collide with obstacle. Case2: Havells share rises to 730 in next 2 days. You increase our stop loss to 710. Now stop loss is above purchase price of 700, which means that there is no risk in trade and you are likely to earn at least 10 Rs in trade. You are still left with money which you want to invest. Let’s say you buy 100 more shares at 730 Rs with stop loss at 710. This way, you are holding 200 shares but your risk is only on newly purchased 100 shares. This means if target of 900 is achieved, you will make money on 200 shares instead of 100 but your risk during trade is on 100 shares only. This is called pyramiding technique. It is always beneficial to average your price once trade is in profit and your initial purchase price is above current stop loss.