Barclays has jumped 73% yesterday
http://www.reuters.com/article/marketsNews/idCALQ63846120090126?rpc=44
How does one deal with this kind of volatility?
1) Be real time in the market....EOD charts don't work...trading is a full time job
2)Avoid stock specific risk by trading in the Nifty. Stock movements tend to cyclical, news driven or rangebound for considerable periods of time.
Some features of Nifty:
1) Very very very liquid...daily volumes in Nifty are 3 times ALL other stocks put together
2)Daily movement capped at 10%...which anyways is extremely rare
3) Trending for a large part of the time...some stocks are trending...others are stagnant...but Nifty always gives you the moves...long or short
4) Index is the weighted average of the 50 most liquid names in India...so well diversified anyways
5) All FIIs and Mutual funds have an exposure on index and index stocks
6) You can play both sides of the market and profit from rallies as well as corrections
Start trading in the Nifty...professionally and not speculation...Nifty main rab dikhne lagega!
Tuesday, January 27, 2009
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