Posted by I used to trade the 5 EMA setup taught by Subhashish Bhai of Power of Stocks. But I found it difficult to stick to in large quantities and during drawdown.
Instead of this blind setup, I can maybe try using a news based setup.
All others trading factors viz. Risk to Reward Ratio, Probability, Position sizing, Psychology etc remains the same. Only the setup (Which anyways comes at last as per Subhasish bhai) changes.
The setup moves from only chart based to also news based. This may give a little more confidence during those drawdowns. And this also connects trading with investing.
Watch this Video from around 65 seconds:
Rakesh mentions the News’ Impact on Shares Price.
Summary from Google:
Gwalior Rayon served as an early, crucial lesson for the late investor Rakesh Jhunjhunwala, helping spark his interest in stock market fluctuations as a child. His father used the stock’s price movements to explain how news and information drive market trends, a lesson that fundamentally shaped his investing approach.
Key Details on the Connection:
- Early Fascination: As a child (around 15-16 years old), Jhunjhunwala observed his father and friends discussing the stock market.
- The Lesson: When young Rakesh asked why prices fluctuate, his father advised him to monitor if there was news about Gwalior Rayon in the newspaper. If there was news, the stock price would typically move the next day.
- Impact: This specific observation allowed him to connect news, information, and price action, cementing his interest in the stock market.
Note: The company mentioned, Gwalior Rayon, was part of the Aditya Birla Group, formerly known as Gwalior Rayon Silk Manufacturing (Weaving) Company Limited, later renamed Grasim Industries.
So Yeah, News Based Trading can be pretty interesting and rewarding!
There are many such news based trades available in market from time to time.
Like,
Resignation of P R Seshadri, MD and CEO, South Indian Bank, Friday 30 Jan 2026 and its 20% negative effect on South Indian Bank’s Stock Price.
Resignation of Aditya Ghosh, CEO of IndiGo Airlines, Friday 27 April 2018 and its huge negative effect on IndiGo’s Stock Price.
This news based opportunities are relatively safer bet offering good risk to reward ratio’s
Hindenburg Adani Case. (The Short Sellers, The whistleblowers)
The Big Short, 2008 Credit Crisis.
Corona. Covid 19
See my last post on this.