Seeking Alpha

Generally Alpha means a measure of performance of mutual fund compared with to a bench mark index if the fund out performs then it would have a Positive Alpha other wise it would have negative Alpha

alpha = Portfolio Return − [Risk Free Rate + Portfolio Beta * (Market Return − Risk Free Rate)]

for example if A Invests in Nifty ETF Rs 100000 and get a return Rs 120000/- after One Year it is understandable that market gave 20% Return.
if B invest Rs 100000/- in a fund, after one year if he got 135000/ it is 35% Return

if risk free rate of interest is 12% Annum

the Market Return is 20-12=8%

Alpha=35-[12+1*(20-12)]=15%

If the fund gave Negative return say the fund value was Rs 65000/ after One year we can calculate alpha using the same formula

Alpha=-35-[12+1*(20-12)]= -42%

As a Trader we should also subtract trade expenses such as Brokarages, software charges and man hour spent to execute the trade.
I would say the real Alpha is

alpha =Trade Expenses- Portfolio Return − [Risk Free Rate + Portfolio Beta * (Market Return − Risk Free Rate)]

So as a trader to achieve a positive alpha needs lot of preparation
The purpose of this thread to share some of strategies to achieve better alpha with out taking much risk
You can get some information about Market return and basic trade plan for next 10 Years from the attached file
In next posts I also would like to share some research work of some well known strategies

Seeking Alpha with SIP

Systematic Investment Plan(SIP) is becoming popular now. Many Mutual Funds are encouraging this investment plan. I also impressed the percentage shown in MF Face books. Most of us believe this method would beat the market return. For Lump sum Investor many financial advisors advising their clients for STPI systematic transfer Plan to get better return. ie Transfer periodically fund to equity fund from liquid or debt fund
Mostly MFs face books gives only past performances of SIP Returns and mostly past performances would not match future returns. This report gives investors to an idea in SIP Returns in various market conditions. So he would know risk and reward ratios
We have taken seven most probable chart patterns for this study
1. Up Trend
2. ‘A’ Shaped pattern
3. ‘U’ Shaped Pattern
4. Down Trend
5. Side ways
6. Crash Market
7. A complete Cycle

You can get complete report in following attachment
https://sites.google.com/site/tradeentry/SIP.pdf?attredirects=0&d=1

Seeking Alpha with Value Averaging

This Post would used for future Various backtest report of Value Averaging

Seeking Alpha using future contract

This Post would used for to get better alpha using futures

Dear Saravanan,


Wishing & Thanking you for starting discussion which most of traders dont give too much importance of the key elements of Trading.

Any how i would like to follow and learn from your valuable insights.

Keep going

Happy Trading