A 5 minute Simple Rule to make Long Term Gains In Stock Market

Sensex 2003-Till Date(Click to enlarge)

This theory is called Higher Highs and Higher Lows method of Investment.

The theory says that when we make an investment we only keep track of recent low to sell our investment.

I explain with the above figure.We invested at point 2 and the market moves up and moved to point 3 before resuming its up trend.

So the recent Low is point 3 and we will sell our investment if Point 3 is broken.

Again the market moves up and made a low at point 4 and we update recent Low point to point 4.

Like this we continue and we update recent low Point to 8 .Then the market starts collapsing and our recent Low point is broken by Point 11 and we sell our Investment.

So this process is repeated again and we buy at Point 15 and currently the recent Low value is point 18 which is 16187 on Sensex .

(The point of making an investment ie Point 2 and 15 is decided when we break recent high in a downtrend)

QUOTE : "There is a risk involved in doing something only if you don't know what you are doing" Warren Buffet.