Usefulness of Moving Average Based Trading Rules in India

S K Mitra


The paper analyzes benefits of moving average based trading rules in India for the period December 2000 to
November 2010 covering a period of ten years. We used two stock indices namely Nifty and Junior nifty, jointly
they cover top 100 stocks traded in Indian market. It is found that many trading rules offer profit opportunity
without trading costs, but the profit vanishes when trading costs are accounted. We therefore estimated
breakeven trading cost for each trading rules and found that it is very difficult to trade below breakeven trading
cost and accordingly, small investors need to keep an eye on trading cost before selecting trading rule.

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