Dynamic approach to estimate performance and minimize losses in stocks

Abstract

Stock/securities selection and recommendation based upon past performance is an investment strategy to an investor. Selection of right stock/securities becomes very critical decision to take. However these days even making the right decision of selecting a security can become a wrong one if the timing of entry into a security is incorrect. Moreover the decision to exit from a security is also an important one because if not taken timely will erode all gains. Also proportion of selecting the securities is an important problem in stock recommendation. It is a complicated task to decide which stock should be selected as in stock market their exists lot of uncertainty on returns from stock making it necessary to make balance between the optimizing expected return and minimizing or avoiding the risk of any losses. In addition to above this work tries to protect the gains made by generating exit signals when the stocks starts retreating and then generates reentry signal again signaling to reenter the stocks. The selection of stocks would be based upon mix of fundamental and technical approaches.