This document describes a risk-free share trading strategy where shares are purchased in increasing quantities as the share price decreases, averaging the purchase price. While this strategy mitigates losses if share prices fall significantly, it is not advisable during economic downturns. The strategy works best when the market is volatile, as share prices are likely to rebound after disturbances. Constraints include the large initial capital required and unsuitability during recessions. The document recommends waiting for negative market conditions before employing this strategy and studying company fundamentals before purchasing.

1. Risk Free Share Trading Strategy
Share Price Share Quantity Total value Brokerage at 1.5% Total Cost
100 1 100 1.5 101.50
95 2 190 2.85 192.85
90 4 360 5.40 365.40
85 8 680 10.20 690.20
80 16 1280 19.20 1299.20
75 32 2400 36.00 2436.00
70 64 4480 67.20 4547.20
65 128 8320 124.80 8444.80
60 256 15360 230.40 15590.40
55 512 28160 422.40 28582.40
50 1024 51200 768.00 51968.00
825 2047 112530 1687.95 114217.95
Using this strategy, the risk of massive losses can be greatly covered. If the share price
fall from 100 to 50 and if you have made a total purchase of 825 shares, the average
price per share would be 55.80 (This is including the non-intraday brokerage).
However, this strategy is not worthwhile during the time of economic downturns. In all
other conditions such as high volatile market behaviour due to budget release or
subsidy shocks, this strategy works perfect. The reason is that the price is likely to
rebound to the normal state once the market recoil to the prominence.
Constraints
 While employing this strategy, purchasing power partita is a concern since an
average of Rupees 1.25 lakhs required to trade a share with 100 Rupee initial hit.
 This strategy may not work during the time of recession.
Do not buy shares when the market is in a good condition. Invest your money in trading
account and wait for the right time to employ this strategy. When you start buying
shares during the negative market climate, it is likely that you may not even dip into this
this 100-50 level. Your share prices are most likely to bounce back in 100-75-100 cycle.
Finally, remember to study the fundamentals of the shares (Currently blue-chip market
is looking good) before making the purchase decision. Penny stocks may attract you, but
most of the penny stocks are sluggish thus investing money in such shares will make
live in a break-even posit. Some of the slightly inciting penny stocks according to me are
KS Oils, Varun Industries, Suryachakra Power, Balasore Alloys, MTNL, Oudh Sugar Mills
and Karnataka Bank. I can be wrong, so study, analyse and take a decision.
Invest Wisely, Live Stresslessly!  Happy Trading!
Copyrighted © Rajeev Ramachandrakurup. Registered on: 2013-03-21 08:08:42 UTC (MCN:
CZ0UN-XLN46-DKU70) - Fingerprint: 2419e94e6900874fa4c10a200979af01e8a8dfaa64db31c688e925f259cce8f8