What’s the best foolproof trading strategy to make consistent returns?

The best way is to indulge totally on following the movements of the market getting to know how it works and only then investing. No one can tell you a specific way to make with a guarantee.

Nothing foolproof exists or ever existed. However few strategies can be better than others and can have high probability of winning. You need to evaluate your strategies through backtesting to arrive at the most consistent one.

Below links contain some of the good trading strategies which has been backtested on historical data:

Amibroker Trading systems

Excel Based Trading Systems

Well if only there were any solid method of jumping off the 20th floor and being certain that you are not going to die, we could probably devise a foolproof method of playing with stock markets. Unfortunately, that is not the case.

“Stock markets are subject to market risks,” this is something you must have heard in your life almost a thousand times. It everywhere! On the TV, on Radios and all potential marketing companies warn the investors and traders of this risk.

Investing in stock market is a risky affair. And you cannot ignore that fact. So every time you invest there is a good chance that your prediction is going to be wrong, and you are going to lose your money and come home to a loud, angry wife of yours.

Hence you have to be careful when you invest. What you can do is walk on the safest path which will also be your road to riches. You need to decide and mark your profit-loss margin and scales. Let’s see this with a small example:

Say you decide to invest in 100 stocks. You decide that a loss of Rs.1 is acceptable to you, and you desire a profit of Rs.3. All the stats are pertaining to a single share of course. Now let’s assume that 70 out of 100 times your prediction is going to be wrong because it’s good to overestimate and play safe. And 30% chance is there that the ball will be in your court. So now let’s do the math.

You loose 70 times which means you lose 70 bucks straight. But you gain 3*30 profit that is 90 bucks. So your profit margin is 90-70=20 bucks!

Now multiply that by 10000 times!

It’s 20*10000!!! Someone’s getting loaded if they decide to scale their profit and loss margins right!

You cannot only win when it comes to stock market. So you have to learn how to balance.!

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Nothing is foolproof. Returns doesn’t come without taking risks.

If you want to go relatively safe, go for SIP in mutual funds.