0Here is something very interesting finding about US market.
Buying at the end of trading session, holding it overnight, and then selling it at the opening bell, which is also called Buy Today Sell Tomorrow(BTST), has proven to be one of the most lucrative trades since 1993. This strategy has paid traders handsomely in past. For example, a trader executing that move every day since then through 2019 would be up about 570%, while buying at the open and selling at the close would have delivered a paltry 3%.
The trend has completely flip-flopped in this pandemic. Buying the open and selling the close has gained about 17% since the start of the year, while holding overnight would have lost traders almost 20%. That’s quite a reversal.
What is the point?
There is no sure shot strategy in this market. The strategy which is successful for now, will maintain consistency for how long nobody knows. This is how if you stop learning new things in stock market then you are no longer able to make money. Recent burning example is Warren Buffet and our so called Indian Buffet, Rakesh JhunJhunwala. Their strategies are no longer profitable. If you look at portfolio of Jhunjhunwala then you will realize that most of stocks are in loss. So, keep learning, never stop it. A lot of changes are there. In past market used to driven by fundamentals mostly but trend since 2008 has changed. Since then market is liquidity driven. Recent example, there is worsening fundamental around the world and hence old investors are crying that market will touch new bottom but market has recovered most of loss due to pandemic since March bottom. This puzzling for most of us.
Keep learning and stick only to risk management. There are two rules, the first is never lose money, and second is that always remember the first rule. In short, stick to risk management, not the strategy.
