QUANT SYSTEM TRADE RECOMMENDATION - 08.08.21
- Capt D. Ganesh Raja
- Aug 9, 2021
- 3 min read
From the desk of Capt.D.Ganesh Raja
Dear Friends,
I was unable to post my blog last week due to a tragic incident in my complex, where 21-year-old son of one our close society member hanged himself and we were just helping the bereaved family. It was so shocking that nobody could believe. These are matters more important than analyzing markets and posting blog. Life is full of uncertainties and sometimes no amount of reasoning can explain these events to reduce the pain that the parents must be going through. To be with them to help out is the least we could do.
Then I got vaccinated and had to take rest to recover from the effects, so all this kept me off blogging.
Markets gave a stupendous breakout clearing the narrow range of past several weeks. The short recommendation which I gave on 26.07.21 at 15856.60 triggered stop loss on 03.08.21 at 16130.75, since stop losses are also on end of day basis. If you ask me if there were any indications about this breakout, yes there were some indications in the daily component of the Quant system but as I had said before that only if an intraday system input was taken it could be capitalized. So just to make myself look good I would not try to hide behind this. My recommendation was positional in nature and many of the parameters which I had analyzed before have still not given a positional buy signal.
It was a short covering rally and hence was very sharp. I had informed before that shorting top was risky business but I am not unduly worried because it proved to be a good example of what needs to be done when movement suddenly happens contrary to what we analyze.
I knew sectoral rotation was taking place by synthesizing various system components but to form a comprehensive view on specific sectors and stocks would have required a lot of time and hard work, which I simply could not do due to the commitments. In my post dated 04.07.21 I had mentioned about taking exposure to Realty sector, so in Trade recommendation log sheet I am going to add this recommendation and update the returns. Just the way I have been honest enough to take a knock of loss-making trades, like the recent one in Nifty, I will also add the profitable ones which I have correctly pointed out. To be fair I would take leverage as 1x for this trade but to avoid someone accusing me that I am inflating returns on hindsight I assign a leverage of 0.5x. Correct way of executing this trade would be identifying and taking position in a basket of realty stocks.
For now, I would recommend to stand aside from the market at the risk of missing out on short term returns. One need to remember that if we are patient and stick to the system, consistent reward is a certainty in spite of occasional knocks one would receive. Drawdown in capital is something common like seasons even for the greatest traders in the world.
For the past one year or so I have demonstrated the robustness of my Quant system and I was lucky that I stayed down long enough to regularly post my blog so far to take the readers through various nuances related to trading. Now again my Marine related assignments will take priority so I might not be able to update you all regularly. Having said that, I would continue to monitor and synthesize market inputs and would post whenever I feel right.
I would request you all to make it a habit to keep checking regularly for my posts.
This week I am not giving any new recommendations since due to hectic schedule I have been unable to run the filters and check all stocks and sectors. For existing trade recommendations please refer to the TRADE RECOMMENDATION LOG and act accordingly.
RETURNS TILL DATE SINCE 04.07.20 : 43.13%
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