TRADING THEME investors check their stop-losses as it underperforms
22 Jan, 201913 min read
Share with friends 
Trading underperformed today. It returned -0.86% to close at 2730.32. It's recent 5 day performance has been -0.54%, -0.27%, -1.2%, +0.16% and -0.36%.
~TRADING is currently in a down trend. Over the last three months Buy-and-Hold has been a better strategy (returning +7.99%) for ~TRADING's investors than shorting it.
~TRADING has been underperforming the NIFTY-50 index in recent time, after having outperformed till 24 Apr, 2018. Over the last 3 years and 1 month, ~TRADING outperformed the NIFTY-50 index on 49% days. Which indicates that on days ~TRADING outperforms the NIFTY-50 index, it's performance is marginally better than on the days it underperforms the NIFTY-50 index.
~TRADING returned losses on 58% days in the last three months. During this time, it delivered on average +0.13% per day. It delivered it's best daily return of +4.52%, during this period, on Wednesday, 12 Dec, 2018. There was initially a bearish trend during this period which started on 14 Nov, 2018 and went on till 22 Nov, 2018. The trend delivered -4.83% losses to investors. This was followed by a bullish trend that started on 17 Dec, 2018 and ended on 20 Dec, 2018. This bullish trend delivered +3.86% to investors.
On monthly basis, ~TRADING delivered losses in more months over the last year, than profits. ~TRADING delivered profits less regularly than NIFTY-50 index. ~TRADING was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Jun 2018, returned -11.67% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~TRADING and NIFTY-50 index, both had periods of 3 consecutive profitable months. It is interesting to note that both ~TRADING and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.
It's how you deal with failure that determines how you achieve success.
-- David Feherty
~TRADING is becoming less volatile overall. In comparison, the NIFTY-50 index is seeing a fall in volatility. During the last three months, there was a significant fall in ~TRADING's volatility from 12 Dec, 2018 to 16 Jan, 2019. While there was a significant fall in the NIFTY-50 index's volatility from 31 Oct, 2018 to 5 Dec, 2018.
Advanced/professional short-term investors should note that ~TRADING has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
NIFTY-50 index has more chance of extreme outcomes than ~TRADING. Therefore, NIFTY-50 must receive a lower allocation than ~TRADING in your portfolio. NIFTY-50 index usually has shorter drawdown period than ~TRADING.
Based on your interest in ~TRADING you may find it interesting to know that NIFTY-GS-15YRPLUS has shown remarkable performance and deserves to be on every investors' watchlist.
... we have a small favour to ask. Help us bring the power of algorithmic trading strategies to individual investors.
All content in this article was automatically generated by algorithms. This ensures that there are no human biases in the analysis provided. This approach to investing is not new and has been around for more than three decades. Yet, it has been available to only the most affluent or elite investors leaving individual investors to trade on emotions (such as fear and greed), intuition and poor analysis from third-parties. We want to change this.
We want to empower investors with all the tools and analysis required by them to make a rational investment decision.
If you found Spotalpha useful, consider making a contribution. For as little as $5 you can support our efforts and it takes less than a minute. Thank you. Contribute