There are three possible strategies:-
1) "Prediction-Prediction" game
You predict and take a position!
2) "Wait for the Ride" Surfer's strategy
You don't take a position but are ready to ride (at the blink of the eye) any wave that comes while budget is being read!
3) "Wait and Catch-on-the-wrong-foot" Hawk Strategy
You don't opt for 1st or 2nd strategy but wait for the over reaction in either direction when budget is unfurled and then take the reverse position!
4) You opt for 2nd and 3rd strategies one by one, i.e. first you ride the tide and when the tide has been serious overdone, you take the reverse position.
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The first strategy is dangerous. It is a high risk high reward strategy.
The second or third strategies are low risk medium but assured returns strategy.
The forth strategy gives you the best of 2nd and 3rd strategy.
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Lacs of crores of rupees are ready to pounce when the budget is being released.
There has to be a short-term overreaction, whatever way.
Remember, punters are watching the money heaps retail investors have kept for tomorrow. Budget or other policy announcement "Earthquake" days are the D-days for the big pockets!
Go against the trend or get carried away this day or play without stop loss, and this day may turn out to be a memorable day in your life...in the negative sense, ofcourse.
On a better note, just remember - Rakesh Jhunjhunwala made his "first crore" while the 1991 budget was being read by the then Finance Minister Dr.Manmohan Singh!!!
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