Many times you would have noticed that a stock that lost the most for the day end up gaining the most next day. Is buying the biggest loser of the day, then selling it tomorrow an effective #BTST strategy? Let's find out with historical data analysis.
Let us test the strategy with last 12 years of historical data, for testing purpose lets consider Nifty 50 stocks.
Rules:
Buy biggest loser of the day at Close price
Sell it next day at Close price
In order to test it with historical Nifty 50 stocks, we should know what are the list of Nifty 50 stocks from 2007 to 2019. Nifty 50 stocks are not constant, the list gets updated at regular time intervals. Some stocks gets added and some gets excluded.
Stocks like RCOM, Unitech, DHFL were part of Nifty 50 stocks once upon a time. So if we test the strategy with list of stocks that are part of current nifty 50, then we might end up with hindsight bias.
From 2007 Jan to 2019 Dec, for last 12 years there were 3085 trades. As you can see from the data, the total PnL is -986% returns. Buying the biggest loser and selling it next day is clearly a consistently losing strategy.
what if we reverse the strategy, it might end up in profits?
Rules:
Short biggest loser of the day at Close price
Buy it back next day at Close price
Yes, it resulted in profits, but the drawdown is more than -65% which means, there is a chance of blowing up of capital. So you need to trade with 1/3rd of your capital. If your capital is 1 lac, then trade with around Rs.30,000 only.
But other things to consider are transaction cost and slippages, which could reduce your over all profits to certain extent.
Coming back to #BTST rules,
What if we buy the biggest loser but the change the exit from Close to Open?
Rules:
Buy biggest loser of the day at Close price
Sell it next day at Open price
By altering the exit criteria, the PnL has turned positive. It has given 535% returns over all.
But if you check the average profit per trade, its very minimal, the above PnL doesn't include transaction charges and slippages, if you add that then even this exit condition will also result in drastic loss.
Conclusion: Applying Buy today sell tomorrow strategy with the stocks that are the biggest loser for the day, is not profitable. Whether you exit at next day close or at next open, both could end up in loss. Instead, STBT has shown some edge. squareoff.in/single-post/Is…
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More than 30 million users actively use @tradingview but very few people have Pine script coding knowledge due to which many users just stick to basic Trading view charting functionality, let me explain how can you write your own Pinescript code using @ChatGPTapp free version🧵
I wanted to study the spike patterns in BankNifty on expiry days, within 5 minutes if market moves greater than 100 points I wanted to track those days and see what happens after such spike, does market makes follow through move or it reverses after spikes?
Go to ChatGPT and enter the below Prompt Create a Pinescript that can track every candle and see if market has moved up more than 100 points or moved down more than 100 points in just one candle and plot bigger text S above that candle.
I just came back from a 10 days solo trip to Bali,I always wondered whats the fun when you travel solo, I was so wrong. Met different people across the world, spent time at mesmerising places, its a different vibe. Trading & Traveling is a deadly combo. Here's how I managed it🧵
Flight - There is only one direct flight from Delhi to Bali operated by Vistra which costs around 35k. Most flights are connecting via KL or Singapore, Use Skyscanner to find cheapest deals. Extra 20kg baggage cost additional 10k. Default is only 7kg.
My biggest blunder was to carry heavy luggage as its for ten days, I realised the laundry cost is very less in Bali. Around Rs.400 for 5kg, so travel light, this can save you additional 10k in ticket cost and makes it easier when you roam around islands in Ferry.
Ever wondered where the big institutional investors are putting their money? Is there any way to track which stock has highest holdings of FII (Foreign Institutional Investors) and DII (Domestic Institutional Investors)? Using this free screener its easier to track. Here's how🧵
Go to and click on Screens and Click on Create New Screen. Large-cap companies have a market cap of Rs 20,000 crore or above. Mid-cap companies is between Rs 5,000 crore and less than Rs 20,000 crore, small-cap companies have a market cap of < Rs 5,000 cr buff.ly/3TkZeji
So let's find out which stocks under each of these segments has highest FII, DII holdings. This query retrieves list of small cap stocks with market cap <5000 cr and DII share holding > 50%, once you run the query it gives you the list of eligible stocks.
Is your Kids spending so much of time on iPad/Phones/TVs? No matter how hard you try, still is he/she spending more hours on it? Me and my friends also face the same problem. Here's what I did that really helped a lot in changing my kids behaviour. 🧵
It all starts at an early age, in order to make them eat you start giving them a phone, playing some random YouTube videos. It gets the kids attention. Then as he grows, in order to keep them busy, so that they dont disturb us, we give the phones. This habit sticks to them.
You cant simply grab the phone from your kid, when you continue to chat with your friends on whatapp group. The only way to stop your kid from using the device is, first you need to reduce your screen time. Remember kids are watching and copying everything you do.
Even though Chatgpt has gained enough traction most of them are using it as a replacement to Google search. But with Chatgpt4, data analysis & backtest have become much easier.
Here's the step by step process.
Sign up with by default you get access to ChatGPT 3.5 only. With this version, you can upload any files to perform any data analysis. It's more of a plain chatbot with AI. chat.openai.com
The real beast is inside Chatgpt4, to get access to it, you need to upgrade to plus with $20 per month as charges.
People who have gone through hardship during their early age, who really struggled hard financially when they were kid, once they become successful, most of them do this mistake when they become a parent. Things which you were not able to buy when you were a kid,
1/n
you start spending so much money for the things your kid wanted. You don’t want your kids to get disappointed, so you tend to buy them those costly toys or whatever they ask for you tend to buy them. It makes you feel more happier seeing your kid happy
as he got what he wanted but for the same thing you struggled during your childhood. But when we do this, our kids never learn one of the very importance lesson in life. Managing Money. They assume they could afford anything easily in life. They will hardly see any real struggle