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In media, news channels and among traders there goes a lot of buzz on what will be decision of RBI policy, its impact on stock markets, what trade to take based in RBI policy – go long or short, buy calls or puts, which stock to buy or short etc.
Whenever someone gets a strategy they start back-testing forgetting that a strategy can be made based on back test, but can you really future-test a strategy? You cannot. For that you have to trade that in live markets.
I personally do not believe in back-testing but for those who believe one of my course subscribers did a back-test on my Conservative Nifty Strategy for 2 years and found it too be superb. He is an experienced Technical Analyst and Full Time Trader. He did my course in 2015, so is it working now? Yes Course Testimonials of Year 2018 are proof of that. Three years in a row if a strategy is working in live markets then it will work in future too.
My strategies work because they are non-directional in nature and are properly hedged. Non-directional takes care of avoiding speculative trading, trying to be rich overnight and hedging takes care of restricting the losses. Hedging takes out the fear factor and non-directional takes out the greed in you.
Both combined obviously will have an effect for a life time and then you can pass this knowledge to your kids as well.
Coming back to the topic – it is quite strange that no one is interested in back-testing what happens to stock markets when RBI policy is declared. The result is known to everyone – nothing major happens to Index at least, barring a few stocks here and there – yet traders in India take too many speculative trades on this day.
Banking stocks will see increased volumes on the RBI policy day. And India VIX will increase. Here is a screenshot of India VIX on 06-June-2018 – see that it has slightly increased:
There is a chance that India VIX will drop once the RBI policy is announced. This is the only common factor that happens on any major policy decision day either by RBI or by the Government of India.
And here is screenshot of NSE on RBI policy day 06-June-18:
Can you see it looks like just other normal trading day.
Yes it is only the General Budget that moves the markets for a short time, otherwise other news if not major – it really does not have any major impact on the stock markets. It may have a minor impact but should it really matter to you as a trader?
You can back test and see what I am saying is true, yet traders increase their speculative traders on the RBI policy day.
Let media do what they want to do, but you as a trader, its better you avoid such noise else you will damage your trading account.
Hope you have learned something from this article. Speculative trading either on a major news day or a normal day will do nothing to your trading account except adding losses.
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2. If you are a new option trader, not much experienced and are making losses you can do my paid course. I recommend Nifty Conservative Option Course for beginners because it is easy to understand and easy to trade. Even a 18 year old young trader or a housewife can learn it and start trading from next day. It will help you to earn consistent monthly income without any software or speculation or stress or big risk. You will learn proper hedging strategies that works in any market condition.
3. If you are banknifty weekly options trader you can do my Bank Nifty Weekly Options & Futures Strategy Course. You will learn future and option hedging strategies that works in volatile market condition.
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Here is complete process of my course1. Once you pay I will send you the course materials for studying to your email.
2. You read and ask me questions via phone/whatsapp/email to clear doubts.
3. Then you start paper trading and still can ask me questions.
4. After about one month you can start trading.
5. Since doubts can come anytime the support will be there for one year.
Within one month you can start trading on your own. No need to depend on anyone once you are on your own.
If you have any question you can contact me.
You can read about me here and my trading mistakes here.
Dilip Shaw, Founder
INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However every trade depends on the trader and his level of risk taking capability, knowledge and experience. Moreover stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website. Please note that I DO NOT give tips or advisory services by SMS, Email, or WhatsApp or any other form of social media. I strictly adhere to laws of my country. I only offer education on finance, investments on stock markets in the best possible way as much as I can through this website. Still, you must consult an authorized advisor or do thorough research before investing in any stock or derivative before trading any strategy given in this website. I am not responsible for any investment decision you take after reading any article given in this website. Knowledge is the only way to get success in stock markets. I try my best to give stock market investing and trading knowledge through the articles posted in this website. Thanks for visiting my website.