Is it possible to make big money on Indian stock market for a newbie? Can anyone share their personal experience?

First of all, to make big money you will have to invest a big sum. A 200% return on 1,000 bucks will fetch you 3,000 only. While a 200% return on 1 million will give you 2 million extra. So, you need to bet big to make big money.

Now you want to make big money fast.

Yes, it is possible. But to keep doing it again and again is not a walk in the park.

I will try to explain how it is possible. And I will keep my answer limited to stocks, as I do not have much experience in derivatives trading.

Before we get into the thick of things, let’s try to understand why stocks go up.

There are three factors that fuel stock market prices higher:

The primary factor is earnings growth. A stock would go nowhere if the underlying company is unable to post earnings growth in the long-term.

Then we need to have a huge demand for the stock, which is generally created when big institutional investors get into stocks, fuelling their prices.

The final one is favourable market condition because three out of four stocks follow the general market trend.

Now, how to make money quickly?

Have you ever noticed how stocks keep going up for few sessions and then go in sideways mode for months?

Well, that’s how stocks move. Contrary to the linear movement in earnings, stock prices witness long periods of sideways movement and periods of huge price spurts.

Have a look at the weekly chart of Edelweiss Financial Services:

The stock had remained sideways for a long time before delivering superb returns since May 2016. Edelweiss has rocketed from 62 to 275 levels in a period of 1.5 years. That’s a whopping ~350% return. Now, if you had invested Rs 10 lakh in this stock, it would be worth Rs 44.3 lakh today.

Next up is Bajaj Finance. Stock has multiplied 12 times in 3.5 years.

Check out Avanti Feeds. The stock has multiplied four times since breaking out of a cup-with-handle base pattern in February 2017.

 

So, these are just few examples of quality growth stocks giving huge returns after long periods of sideways movement. Such kind of returns was only because these companies had posted strong sales and earnings growth.

The strategy of buying quality growth stocks at strong technical breakouts during market uptrend was put forward by U.S. investor William O’Neil and is popularly known as CAN SLIM.

In a nutshell, big money can be made quickly in stocks:

1. If you bet big

2. Buy quality growth stocks when they break out of sound base patterns

That being said, you need to be a little patient and give ample time to stocks to prove their worth.

Happy Investing!

3 Replies to “Is it possible to make big money on Indian stock market for a newbie? Can anyone share their personal experience?”

  1. Touching higher highs on a regular basis, the Indian markets have backed the promising returns with stability, repaying the trust of the public, while defying the suspicions of others. Such robust performance is testimony to the fact that the numbers are not a fluke, instead, introduction of shrewd policies that promote transparency, efficiency and accessibility have made the financial environment immune to global and domestic breakdowns (case in point being Brexit, Demonitisation, GST). Thanks for sharing a great article.

  2. canslim rocks…..i came across canslim this year..and tested it on on stocks 10yrs back since 2008…to my surprise ……canslim caught many big winners by their earnings….hope in future market gives such opportunities….

    1. We are glad to know that you have backtested the strategy in the Indian market. We had done the same and saw that a majority of big winners possessed CAN SLIM traits just before they began their major price moves.

Leave a Reply

Your email address will not be published. Required fields are marked *