I earned my first 50 rupees at age ten, when I helped my grandmother use her phone to transfer money online. My father, a financial advisor, chuckled at my juvenile enthusiasm of earning more. When I was 15, he offered me a book: The Intelligent Investor by Benjamin Graham, which awakened me to the power of sound decision-making and risk-management.
Eager to witness how these factors played out in reality, I started closely following major stocks like ITC and MRF. Using online resources like Trendlyne and Khan Academy’s lectures on finance, I gained basic knowledge of finance. Further, I subscribed to leading financial newspapers, through which, I honed my understanding of macroeconomic factors, industry-specific factors, competitive analysis, and company financial statements and management.
I also sought real-world experience through an internship at a quantitative trading firm. There, I learned to use regression models to predict stock prices, culminating in a worksheet with regression models for imaginary stocks and their predicted prices.
The Power of Social Media: Building a Thriving Community
Seeking to spread my newfound insights, I started a Twitter page for finance enthusiasts (@AaravJain2050), where I analyse stocks of listed companies and try to predict their future prices based on historical trends, chart patterns and other indicators. Using technical analysis, I share ideas on the buy and sell points of different stocks along with the rationale and explanation of the chart.
My engagement with this community has prompted vibrant discourse among over 750 people. Overall, I’ve received over 3,00,000 total impressions on my tweets. Together, we swap interesting insights and discuss doubts, harnessing the value of our collective knowledge.
What I’ve learned in the past two years and my future goals
My objective with this project is to help people understand the importance of taking calculated risks and making informed decisions with their financial investments.
On my page, I employ a data-driven, rigorously systematic approach for more effective market performance predictions. I’ve learned that it is imperative to have a fixed trade plan based on thorough analysis of trends and patterns while avoiding “popular opinions,” biases and sentiments, not falling prey to fleeting hype.
My journey: Accurate predictions and trade plans
In my analysis on Twitter, I use candlestick charts and concepts of support and resistance to find points in a chart where one can trade with a low risk and aim for a potentially high reward. When a stock performs as expected, I wait for it to breach the key moving average, a sign of weakness.
This is generally preceded by the shortlisting of fundamentally sound companies and stocks that have strong buying power. I also keenly look for low-risk areas, where one can buy such stocks with a small stop loss and a larger target.
Advice for students who want to do the same
Stock analysis and finance is a huge field. Start small by educating yourself on the terms related to the stock market.
Next, keep yourself updated with current affairs and government regulations. Stock markets are a great embodiment of the Butterfly Effect. While it’s impossible to make 100% accurate predictions about stocks, we can monitor current events and shifts in global politics that influence the market, like the six-day blockage of the Suez Canal in 2021 that had a huge impact on oil and grain companies.
My study of the mathematical models in stock analysis has inspired me to pursue a major in finance. I plan to dive into the intersection of finance and statistics and strive to channel the transformative potential of data-driven analysis in investing.
(Views expressed are the author's own)
