|MORE ABOUT INDIACHARTS AND ROHIT SRIVASTAVA|
the first time I set my eyes upon prices and price movements in the
markets the use of visual representation of price movement to identify
trends became the obvious passion. In the early 90's though the tools
available in India were limited and most books needed to be imported. Most
of that has seen a revolution.
From my early learning of the Dow theory and momentum trading I was never satisfied with the results as momentum tools were great to follow trends but did not know when to stop or when things were going to change. In 1999 I introduced my self to Elliott Wave analysis and that changed everything. The strike rates and accuracy moved up considerably. Elliott Waves capture societal trends and the points of change in the mass public mood. Doing so it is the only technical tool that has forecasting capability v/s other tools that are trend following in nature.
Once you have gotten there you know its worth sharing. Especially after seeing the huge losses of investors during the post 1994 economic downturn there was a sheer need to do something for retail investors. Unfortunately that's a mammoth task of learning and relearning for them. Not just about markets but money how its created and controlled through the governments monetary tools and its effect on our economic well being. The 2008 bear market around the world even more highlights this need.
'INDIACHARTS' my free view and analysis is a small contribution to keeping people informed about what the wave patterns have to say about the future. To those who are willing to pay heed to the wave forecasts it can protect you from financial disasters, and then actually help you create some wealth.
In my experimentation with markets led me to the belief that absolute returns and not relative returns were the way forward. The markets offer trading opportunities year after year to earn 20-30% every year. To capture those trends and then use the power of compounding over time would anyway see you outperform. But to spend all your time and energy to try and beat an index at its own job is a waste of resources both mental and financial. Competition among Asset managers however has given way to this trend which forces long term investors to trade and vice versa which is principally wrong and self defeating to the objective.
That brings me to what I do now. After small stints as a Research Analyst with the print media [DSJ] and an investment company [Sanwa Finance] my longest career is with Sharekhan Ltd. since 2001 Initially in the advisory role as a Market Analyst, then Head of research and Market Strategist and now in charge of a unique product line that focuses on the above objective of Absolute returns. Managed Futures a/c under the PMS structure of SEBI for clients with Zero leverage [100% margin] and Zero AMC fees!!
The premier product is 'Nifty Thrifty' an automated trade generation model that is always long or short on Nifty Futures. The chart below shows how these signals look on EOD prices. The actual performance lies in our ability to execute trades on the day of the signal itself and not the next day capturing the testing performance to its fullest possible.
|The next chart shows the NAV based on back-testing for the entire Sensex history since 1978. Its plotted on a log-scale to show that its consistently rising over time and not skewed. The minor dips in NAV are a maximum 10-25% representing the drawdown risk.|
|The final chart shows actual performance till Jan 2011, since we actually started trading for clients in Feb 2006 under Sharekhan's PMS. The blue line is the NAV of the client after costs which has grown from 10 to 23.57[Aug/2011]. The pink line is the Sensex that was at 10200 when we started is at 16676. These NAV numbers are after fees and charges.|
For now this is what I do and believe in.
[Note this is not a solicitation to subscribe to these products or invest
in them. That decision lies with you and based on your judgment alone]
The object here is only to highlight what absolute return strategies can do for long term investors in terms of growing their wealth. The key however will lie in having the right strategy to capture returns from market movements every year and manage risk within defined limits. Technical analysis provides the tools to do so and my experience with the subject is so far very rewarding. The last decade has seen many investment products but more often than not the sales pitch is based on relative returns or Buy and Hold. Investors need to be more inquisitive about what they expect from an investment plan before investing. In most cases like Mutual Funds the onus of an exit from the market continues to lie with the investor who believes that the professionals will take that call. Knowing that the risk is still yours will allow you to act accordingly where needed.
With INDIACHARTS I hope to keep investors and traders as informed as I can through periodical updates on market trends not just in India but around the world and in commodities and currencies that act as indicators of financial change.
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|Rohit Srivastava: ' This is a free update on the markets for public reading. My views
are based on my analysis of the markets after years of such analysis, since
Investment decisions made on the above analysis would be at your own risk and I
take no responsibility for your decisions based on the above
Rohit Srivastava is an employee of Sharekhan limited, you may note that Sharekhan limited and/or its subsidiaries /group companies are not connected with this website in any capacity.