Sensex DailyMovingAverage Strategy

Intro 📝

A study conducted to get an idea on how simple moving average based entry-exit strategy compared with buy and hold strategy on BSE Sensex.

A simple moving average based Entry-Exit Strategy:

1. To exit the sensex every time it crosses below a pre-determined moving threshold
2. Re-Enter only when the sensex crosses above the threshold.
3. Time period is considered from 1 September 2003 (the time when BSE followed free float market cap).

Conditions

The Findings 🤯

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Entry-Exit Based Strategy:

1. Perform best in predicting the drawdowns and move to cash
2. Lags in giving extra-ordinary uptrend when compared with buy and hold

Buy and Hold:

1. Beat Entry-Exit based strategy but not with huge margin
2. Follows a complete cycle of drawdowns (as it does not move to cash)

Alternatives 😇

1. Entry-Exit strategy best outperforms when we take 75 DMA.