Insider buying in a company can signal positive developments. We use insider buying to form a monthly trading strategy.

On the first of every month, get the company with maximum insider buying in the previous month and place BUY order and SELL the same on the last trading day of the month. I backtested this from January 2016 to September 2021 for 69 months, here are the results. Below is the summary and cumulative graph for initial corpus of 2 lakhs.

Corpus 200000
Stop Loss -5%
Net Return With SL 178%
Net Return Without SL 6%
Monthly Average With SL 5148.582954
Monthly Average Without SL 170.9495817
Max Profit 55534.31983
Max Monthly 01-11-2020
Max Company ELGIEQUIP
Short Term Capital Gains Tax 15%
Tax 83287.83357
Post Tax Net 471964.3903
Post Tax Return 135.98%
Jan 2016Mar 2016May 2016Jul 2016Sep 2016Nov 2016Jan 2017Mar 2017May 2017Jul 2017Sep 2017Nov 2017Jan 2018Mar 2018May 2018Jul 2018Sep 2018Nov 2018Jan 2019Mar 2019May 2019Jul 2019Sep 2019Nov 2019Jan 2020Mar 2020May 2020Jul 2020Sep 2020Nov 2020Jan 2021Mar 2021May 2021Jul 2021Sep 20210100000200000300000400000500000
LegendCum Corpus (With SL)Cum Corpus (Without SL)Insider Buy TradingInsider Buy MonthCumulative Corpus (Rs.)


How do I start off ?

  1. Start off with an amount you can afford to lose. You can make a copy of this excel to calculate returns for different corpus amounts and stop losses.

  2. Subscribe to Vikhed Monthly Insider Summary Newsletter. Every month, you’ll get a mail of companies with maximum insider buying and maximum insider selling.

  3. Buy the company with maximum buying and hold till the end of the month.

  4. You might have to monitor the stock price for stop loss.