Buying an Index ETF Only on Red Days — What the One-Minute Rule Actually Does
Key takeaway
- The rule is a spending schedule, not an edge. Deploying only on down days does not beat deploying on a fixed date, because the market closes up on slightly more days than it closes down — that asymmetry is the whole reason the line slopes upward, and waiting is a bet against it.
- The best line in the video is the warning bolted onto the end: "do not implement this strategy on stocks." Averaging into a broad index and averaging into one company are different bets, and only one of them has a floor.
- "ETF cannot be zero" is true and misleading in the same breath. A broad index will not go to zero. It can still halve — and a 50% fall needs a 100% gain to get back to where you started.
Learning pathBuild a mean-reversion system: buy the dip with rules, not hopeStep 6 of 9
Read before this:The RSI-2 Dip-Buying System, Tested — and the Rule It Quietly Leaves Out
Based on a clip by Pushkar Raj Thakur: Stock Market Educator (@PushkarRajThakurOfficial) — YouTube
The rule, in full
Work out your monthly investment. Divide it by the number of trading days in the month. Look at the index once a day. If it is down, buy one slice. If it is up, buy nothing and carry the slice forward.
The worked example in the video: you earn 50,000 a month, you invest 10% of it, that is 5,000. About 20 trading days, so 250 a slice. A red day buys one slice. Four green days in a row buy nothing, and the slices stack up until the next red day, when several go in at once.
Three things the rule gets right
It is a habit with a fixed budget, a fixed instrument and a one-minute decision. Most plans that fail, fail on one of those three.
- It fixes the amount before the market has an opinion. Ten percent of income, decided in advance, is the part of investing that does almost all the work. See compounding and time horizon.
- It stops you buying into a spike. The single worst habit a beginner has is buying the thing that just moved. A rule that mechanically forbids buying on green days removes that failure mode entirely.
- The daily decision is genuinely one bit. Red or not red. There is nothing to interpret, so there is nothing to talk yourself into.
That third point is underrated. Plans die from decision load, not from being wrong. A rule you can execute in a minute on a bad day is worth more than a better rule you skip when you are busy.
What waiting for red costs you
There are more up days than down days. A rule that only buys on down days is, structurally, a rule that spends part of every month sitting out of the thing it is trying to own.
Count it on the index you actually buy. Over any long stretch, the share of days that close up is a little over half — and that small edge, repeated, is the entire reason a broad index rises over decades. Holding cash on those days is not free; it is the cost you are paying for the feeling of buying lower.
The second cost is the leftover. In a strong month you may get eight red days against a twenty-day budget, and the remaining twelve slices never go in. The video does not address what happens to that money, and it is the most common way this rule quietly turns into holding cash and waiting for a crash.
What the video implies
- Buying red beats buying on a date
- Averaging happens continuously
- The budget always gets deployed
What it actually delivers
- A habit that blocks euphoric buying
- Averaging happens on a subset of days
- Leftover cash needs its own rule
The honest comparison with a fixed-date plan is not which one wins — it is which one you will still be running in year five. If red-day buying is the version you will keep, the small drag is a fair price. If a standing instruction on the 1st of the month is the version you will keep, take that instead and stop watching the index.
The warning at the end is the most valuable minute
"If you use the same strategy for stock investing, then it will be the opposite. You will lose in stock investing." This is stated twice, at the start and at the end, and it deserves the emphasis.
Buying more of something as it falls is called averaging down, and whether it is sensible depends entirely on whether the thing has a floor. An index of 50 or 500 companies is continuously repaired: a company that stops performing is dropped from the index and replaced. One company is not repaired by anybody.
The video's own phrasing is the clearest version of it: you bought at 100, then 80, then 60, and now it is 50 — "you feel that it will go up". Feeling is doing the load-bearing work in that sentence, and it is the reason averaging down into single names is how small accounts get destroyed. See cutting losses and position sizing.
"An ETF cannot be zero" — true, and not the protection it sounds like
Not going to zero is a very low bar. The risk that actually ends people is a long, deep fall that they sell into.
There is also a category error hiding in the word ETF. The argument in the video — many companies, one cannot sink the fund — applies to a broad index ETF. It does not apply to a single-sector ETF, a single-country small-cap ETF, a thematic ETF, and it very specifically does not apply to a leveraged or inverse ETF, which is built to lose value over a long holding period even when its index goes nowhere.
| Instrument | Diversified? | Safe to average down? |
|---|---|---|
| Broad index ETF (top 50 / top 500) | Yes | This is the case being described |
| Sector or thematic ETF | Partly | A whole sector can stay cheap for a decade |
| Leveraged or inverse ETF | No | No — decay makes holding a losing trade |
| A single company | No | No — this is what the video warns against |
The one argument to drop: buying abroad because the currency is falling
The case for owning foreign index exposure is diversification. The case offered here — the rupee went from 75 to 83, so you gain on the way — is a forecast wearing the clothes of a fact.
A currency that has weakened for several years is not thereby a currency that will keep weakening. Exchange rates are among the least forecastable prices there are, and a move that has already happened is the worst possible evidence about the next one. If the rupee strengthens, the same mechanism runs in reverse against your foreign holdings.
One more thing to name plainly, because it changes how you should read the video: its description is entirely affiliate promotion, and a segment in the middle offers free shares for opening an account through a link. That does not make the ETF explanation wrong — most of it is accurate and clearly taught. It does mean the choice of platform in the video is not a recommendation you should weigh the same way as the method.
What to keep, what to change
Keep the budget, the instrument and the ban on chasing green. Add a monthly sweep. Ignore the currency call.
| Claim | Verdict |
|---|---|
| Invest a fixed percentage of income | Keep — this is the part that compounds |
| Buy only on down days | Keep as a habit, not as an edge |
| Never average down into a single stock | Keep — the most useful minute in the video |
| An index ETF cannot go to zero | True, but plan for a 50% fall, not a 100% one |
| Buy US assets because the rupee is falling | Drop — diversification is the real reason |
And the framing to resist, which is in the title rather than the method: this is not regular income from the stock market. It is regular buying. The income, if it comes, arrives years later and only if you never sold — which is a completely different discipline from the one this video teaches. See why most active investors trail the index.
Try this week
- Write down the monthly number first — a percentage of income, decided before you look at any chart.
- Divide it by the trading days in the month. That is your slice size; do not change it mid-month.
- Add the rule the video is missing: on the last trading day, whatever is left goes in regardless of colour.
- Check what you actually hold. If it is a sector, thematic or leveraged ETF, the "cannot go to zero" argument does not cover you.
- Count the up days and down days on your index over the last 100 sessions. Whatever your answer, it tells you how often this rule will let you buy.
Common questions
Is it better to buy ETFs only when the market is down?
Not on average. A broad index closes up on slightly more days than it closes down, so a rule that only buys on down days keeps money in cash during the days that produce the long-term return. What it does buy you is behavioural: it makes it impossible to buy into a spike, and it turns a daily decision into a single yes-or-no. If that is what keeps you invested, the small drag is a reasonable price — but it should be understood as a habit, not an advantage.
What is the difference between an ETF and a mutual fund?
Both are pooled funds holding many companies. A mutual fund is bought from the fund company and priced once a day at its net asset value. An ETF trades on an exchange like a share, so its price moves through the session and you buy and sell it from a brokerage account. For a broad index, the practical differences that matter most are cost, the ability to buy at any moment during the day, and — on some platforms — the ability to buy fractional units.
Can an index ETF go to zero?
A broad index ETF holding 50 or 500 large companies effectively cannot, because the index drops and replaces companies that fail. But that is a low bar. Broad indices have fallen by half and taken years to recover, and a 50% fall requires a 100% gain to get back to even. The risks worth planning for are a deep drawdown and your own reaction to it, not a total wipeout. Narrow, thematic and especially leveraged ETFs do not carry the same protection.
Why should you not average down into a single stock?
Because an index and a company are repaired by different things. When a company inside an index deteriorates, the index eventually drops it and holds something else, so the falling price you are buying is temporary by construction. A single company has no such mechanism: a falling price may simply mean the market is right, and there is no level at which buying more fixes it. Adding to a losing single position is one of the most reliable ways to turn a manageable loss into an account-ending one.
How much of my income should I invest each month?
The video suggests 10% as a starting figure and argues the percentage should rise as income rises rather than expenses rising to match. The precise number matters less than fixing it in advance and automating it, because the amount you contribute dominates the return you earn for the first several years. Set it at a level you can maintain through a bad month — a plan you pause is worth less than a smaller plan you keep.