2 Under Rated Strategies To Outperform Your Benchmark Index

In this article, we will discuss:

Introduction

In the fast-paced world of stock trading, where every decision counts, two often overlooked strategies stand as pillars of potential success: real-time tracking and leveraging insights on the top market movers. As we embark on this journey of financial empowerment, we'll delve into the intricacies of these strategies, understanding their significance, and how they can elevate your trading game.

Conventional Practices and Traditional Challenges

Benchmarking Woes:

Let us set the context first. Many traders find comfort in comparing their returns to broader market indices, a practice deeply ingrained in conventional wisdom. However, this well-trodden path leads to a fundamental disconnect. Market indices, by their very nature, are generic. They encapsulate the performance of the market as a whole, neglecting the unique dynamics of individual trading strategies. As a consequence, traders relying solely on these indices risk making decisions that may not align with their specific goals and risk appetite.

Lack of of Real-Time Tracking:

Another common pitfall is the lack of real-time tracking. In stock trading, fortunes are made and lost in seconds. Delayed information acts as an invisible barrier and traders operating without the immediate insights provided by real-time tracking are essentially navigating blindfolded. This delayed visibility can lead to reactive rather than proactive decision-making, exposing portfolios to unnecessary risks. The constant hustle-bustle of daily life is a common reason cited by most traders with respect to their inability to regularly track their portfolio. Others simply do not know how to go about this process.

As a result of this conventional benchmarking approach, along with the absence of real-time tracking, traders may fail to grasp the impact of sudden market shifts. This can lead to missed opportunities for timely booking profits, and miscalculated risk exposures. The absence of a comprehensive measurement tool further complicates the situation, leaving traders with an inaccurate view of their true performance in the market.

It's time to reconsider our methodology and discover tactics that provide a truer view of individual performance, and help you not just match the performance of benchmarks; but beat them.

The Importance of Knowing Your Personal Index

The Personal Index is a dynamic metric that reflects the true picture of your trading journey. It's not just about profits and losses; it's about aligning your trading strategy with your financial goals. Calculated by comparing your rate of return with the index of your choice, this metric is a personalised yardstick tailored to your unique objectives.

Strategy 1: Empowering Decisions with Real-Time Tracking

The ability to adapt to real-time market dynamics is not just an advantage; it's a necessity. By tracking price movements, market news, and live market data in real-time, you gain a competitive edge, making decisions with agility and precision. This isn't just about keeping up; it's about staying ahead. Here are some of the several reasons why real-time tracking sets you apart from the crowd. Naturally, 

Benefits:

  • Swift Decision-Making: Real-time tracking provides the capability to respond to market shifts as they unfold, ensuring your decisions are timely and well-informed.
  • Risk Mitigation: The financial landscape can change in the blink of an eye. Real-time tracking allows you to identify potential risks swiftly, enabling proactive risk management and reducing exposure to unforeseen events.
  • Precision in Trading: Whether it's capitalising on a sudden price surge or cutting losses at the right moment, real-time tracking empowers you to make decisions at the optimal time.
  • Enhanced Strategy Execution: For traders employing strategies that require split-second timing, real-time tracking becomes indispensable. It's not just about reacting to news but successfully executing complex strategies at just the right time.
  • Custom Alerts for Personalised Insights: You can set up alerts tailored to your trading strategy. Whether it's a specific price level, news event, or a change in market sentiment, personalised alerts keep you informed and allow you to act speedily.
  • Live Market Sentiment Analysis: Beyond just prices, real-time tracking allows you to gauge the sentiment of the market at any given moment. It helps you understand how traders are reacting to news and events, providing an additional layer of insight.
  • Intraday Trading Precision: Intraday traders thrive on minute-by-minute movements. Real-time tracking is their trusted companion, empowering them to capitalise on short-term price fluctuations.
  • Adaptive Portfolio Management: Market conditions evolve continuously. Real-time tracking enables you to dynamically adjust your portfolio based on emerging opportunities and threats, ensuring your investments remain aligned with the prevailing market trends.

Strategy 2: Navigating Market Trends with the Top Market Movers

As per the BSE, there are over 5,000 companies listed on the exchange. With so many options, identifying the ones poised for significant movement can be daunting, to say the least. Wouldn’t it be awesome if you could know the stocks that have been gaining the most traction? Knowing these top movers can influence your portfolio and help you identify stocks to invest in for lucrative gains. But, how can you identify such stocks reliably? Samco’s trading app is your go-to avenue with its remarkable top market movers widget. 

Benefits:

  • Strategic Stock Selection: The Top Market Movers Widget isn't merely a list; it's a curated selection of stocks making significant moves within your benchmark index. By leveraging this widget, you gain insights into potential outperformers, allowing you to optimise your portfolio for success.
  • Informed Profit-Booking: You can capitalise on the insights from the widget to strategically book profits. Identifying top gainers helps you make calculated decisions to secure your gains at the right moment.
  • Opportunistic Buying: The process is not just about identifying gainers; it's about recognising potential opportunities. The widget unveils stocks on the move, presenting a chance for you to strategically enter positions aligned with emerging market trends.
  • Risk Mitigation Through Losers: Just as gains matter, losses need attention too. The widget highlights top losers, providing a crucial layer of risk management. Recognising stocks underperforming in your benchmark index allows you to make informed decisions on reducing exposure or exiting positions.
  • Trend Confirmation: While technical analysis tools provide insights into trends, the Top Market Movers Widget offers a real-time confirmation of these trends. You can validate your analysis by observing which stocks are consistently making significant moves.
  • Adaptive Trading Strategies: As market conditions change, so should your strategies. The widget acts as a guide, helping you adjust your trading approach based on the current movers within your benchmark index.
  • Understanding Market Sentiment: Beyond individual stock movements, the widget gives you a pulse on market sentiment. Recognizing whether the majority of stocks are gaining or losing provides an additional layer of insight into overall market dynamics.

The Trump Card: Knowing Your Personal Index

Now that we have given two underrated strategies that you can use to outperform the benchmark index of your choice, here’s a revelation. Simply tracking the market index may help you match, at best. But, beating the index is the ultimate goal of every trader. Isn’t it? How can you do that? By knowing your Personal Index.

The personal index is more than a calculation; it's a reflection of your decisions aligning with your financial goals. It is calculated by taking into account all your holding including the opportunity costs that often get ignored. By comparing your personal rate of return with a chosen benchmark index, you can not only embrace your successes but also find areas of improvement in your trading strategy. Samco’s Personal Index serves as your compass, guiding you to an accurate understanding of your performance in the market.

Conclusion

So, there you have it. By incorporating real-time tracking of the market and your personal index, and the Top Market Movers Widget into your routine, you're not just observing the market; you're strategically geared up to ace the index.

Disclaimer: INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE INVESTING. The asset classes and securities quoted in the film are exemplary and are not recommendatory. SAMCO Securities Limited (Formerly known as Samruddhi Stock Brokers Limited): BSE: 935 | NSE: 12135 | MSEI- 31600 | SEBI Reg. No.: INZ000002535 | AMFI Reg. No. 120121 | Depository Participant: CDSL: IN-DP-CDSL-443-2008 CIN No.: U67120MH2004PLC146183 | SAMCO Commodities Limited (Formerly known as Samruddhi Tradecom India Limited) | MCX- 55190 | SEBI Reg. No.: INZ000013932 Registered Address: Samco Securities Limited, 1004 - A, 10th Floor, Naman Midtown - A Wing, Senapati Bapat Marg, Prabhadevi, Mumbai - 400 013, Maharashtra, India. For any complaints Email - grievances@samco.in Research Analysts -SEBI Reg.No.-INHO0O0005847.

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