NiftyBeES--Long term SIP strategy

#1
Hi All,

I am thinking of SIP on NiftyBeES.

Following is my strategy. I 'd appreciate if people can give me their views on this.

Today 200MA of Nifty is around ~4100.

I have following plan

When Nifty is below 34EMA buying Rs4000 NiftyBeES/per week
When Nifty >34EMA & <50EMA buying Rs3000 NiftyBeES/per week
When Nifty >50EMA buying Rs2000 NiftyBeES/per week until is crosses 200EMA.
Then wait for few more days and sell all of it.

People pls give some opinion on this, based on that I will or will not go ahead with this strategy.

Regards
Yogesh
 

AW10

Well-Known Member
#2
Your system is not complete until you define exit rules - both profit as well loss. Exits are the one that are responsible for the health of your account.

Then wait for few more days and sell all of it.
This exit rule is vague.
What do you mean by "few more days". ?
What if it starts goes near 200dma but agains comes down without crossing ?
At what stage will you cut your loss, in case market goes down or you see x% of loss on your cummulative holding ?

Have u seen in the past, for how many weeks nifty has been below 34d ema, between 34d and 50d ema, above 50d ema and above 200d ema. This will give u approximate idea about how long will you keep buying and how long can u afford to hold.

happy trading.
 
#3
Hi AW10,

Thanks for pointing that to me.

Now, consider this.

Senario.

Nifty 34EMA below 50EMA
Keep buying Rs.3000 NiftyBeES/per week until 34 EMA crosses 50 EMA..thereafter no more buying.

Nifty 50EMA crosses or nears 200EMA(200EMA acts as strong resistance
Selling all of the bought NiftyBeES.

After checking daily Nifty graph of over 10yrs..it seems that whenever 200EMA is crossed by 50EMA..it takes a lot of time for the market to cross it again.

Now, do u think this strategy makes sense?


Regards
Yogesh
 

AW10

Well-Known Member
#4
Few observations.

Nifty 34EMA below 50EMA
Keep buying Rs.3000 NiftyBeES/per week until 34 EMA crosses 50 EMA..thereafter no more buying.
What if nifty contiue to go down, 34ema will continue to be below 50ema.
So your strategy will continue buying in falling mkt. As per my chart, in Jan-08
34ema came below 50ema and since then it has not gone aboce 50ema.
That means, with this strategy you would have ended up buying everyweek of 2008.
If thats what u are aiming at then nothing wrong. It is important to understand the strategy and psychological impact of it on individual.

Maybe you would like to put someother criteria when u won't buy.

------------
Nifty 50EMA crosses or nears 200EMA(200EMA acts as strong resistance
Selling all of the bought NiftyBeES.

After checking daily Nifty graph of over 10yrs..it seems that whenever 200EMA is crossed by 50EMA..it takes a lot of time for the market to cross it again.
If I read between the lines, then your Exit criterial is contradicting your observation on nifty chart.
As per observation, once 50ema crosses 200ema, it remains on the other side for long time. That means, if 50ema has gone above 200 ema then mkt is entering bullish zone and it will not turn into bearish (50ema again coming below 200ema) for long time.
If that is the case, then as per your exit rule, you will be exiting all accumlated position on the day when market is entering bullish zone. You would rather be staying with your position because that is the time when it the pain of buying in bear phase is going to reward you.

Hope you see my point here.

btw, Appreciate your originality in thought process and putting in effort to develop it further. Certainly right approach to investing that is rare to see.
Keep it up.

Happy Trading.
 

bandlab2

Well-Known Member
#5
buying nifty bees in a SIP mode can be a good alternative to MF SIP. you can buy evey week or every month. i am doing this strategy to build my long term portfolio for my daughter

1 unit = 1500rs

every monday buy 1 unit of RIL
every tuesday buy 1 unit of LT
every wednesday buy 1 unit of SBI
every thursday buy 1 unit of AIRTEL
every friday buy 1 unit of NIFTY BEES

for my broker the fees is less so i can buy 1500 rs or 15000 rs, fees is same proportionatly. whereas ith ICICI Irect minimum rules are there

evey month, i change the days for stock, means i will buy RIL on tuesday, LT on wednesday like that. also i skip the expiry week completely. so i buy only 3 weeks. i buy on close of first 5 min d
 
#6
Hi AW10,

humm..interesting point again.

I am attaching nifty daily graph of last 15yrs.

right now, [email protected] is moving downwards.

I read somewhere, after a move..accumulation continues before next definite move in one direction.

As, we see in the graph, Nifty would now enter in accumulation zone.
I am thinking starting to buy contiuously keeping 6000 as target.
Now, I ll keep my amount of investment constant throughout,

Nifty <[email protected]/per week
Nifty 34EMA<50EMA--buying @Rs3000/per week
Nifty <Target & 34EMA>50EMA--buying @Rs2000/per week


, which means that at lower levels I ll have more units bought than at higher levels.

I read/observed, that whenever there is a breakout from accumulated zone the impulse is very high before it re-enters another acccumulation zone.

Hence, if I continously buy and my strategy reaches its target. I ll have more units bought at lower levels than at higher levels, leading to much lower average.
And then selling it all of it when my target is acheived.

Why I have chose 6000 as target??
My reasoning is that as Re has inflated in past few years, it 'd continue to do so in future as well, therefore, it is imperative that 6000 ll be broken for sure in few years.

I 'd appreciate your views on this.

Regards
Yogesh
 

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