Hi friends
Remember the last time you took that Nifty option trade?
You bought Nifty call option at 140.
Then it started going down-139-138-135-130-129
then it stalls there
but due to your anxiety you already bought more of same options at 139,137,136.
then your cash is over.
no more money to buy.
silently watch price go against you.
is what you do.
How do you beat this kind of situation?
first
fix your risk
for options
if price is above 50 rupees,use stoploss of 2%
if price is below r 50, use rs 2 as max risk.
you can use Low at Entry bar minus 2 as stoploss FOR LONGTRADE
second
rules are there to be followed.
Dont Just buy more as price drops at every 1 point drop.
instead try to buy after every half atr drop or even after 1 atr drop in price.
This reduces your headache.
Dont buy as price moves up.
see last low point and find Low +2 atr is how much.
chances are once this point of high is reached , price may to reverse.
DONT BUY NEAR THIS AREA.
C) Good entry is on a pullback as pros do.
D) How far price can move?
NOBODY KNOWS OR EVERYBODY KNOWS(ALL POOR TRADERS GUESS).
Price can move down by 2 times ATR(10) OR ATR(14) FROM CURRENT LEVEL.
IN SHORT TRADE PRICE CAN BOUNCE UP 2 TIMES ATR FROM CURRENT PRICE.
YOU CAN USE 2.5 ATR OR 3 ATR AS SPACE BETWEEN CMP AND BOUNDARY OF MOVEMENT OF PRICE.
SOME TRADERS USE 1.5 TIMES ATR. THY ARE MORE IN HURRY.
------------------------------------------------------------
UPSIDE MOVE 1.5 ATR OR 2 ATR OR 2.5 ATR
CURRENT PRICE
DNSIDE MOVE LIKELY 1.5ATR OR 2 ATR OR 2.5 ATR OR 3 ATR
-----------------------------------------------------------------
SO WAIT LEARN TO WAIT TILL YOUR ENTRY SAFE IS REACHED.
IT FAILS SOME TIMES DONT WORRY.
BETTER ENTRY REDUCES LOSSES.
IF WRONG EXIT BLINDLY AT YOUR LIMITED RISK MAXIMUM.
SAME METHOD YOU CAN APPLY TO TARGETS ALSO.
Remember the last time you took that Nifty option trade?
You bought Nifty call option at 140.
Then it started going down-139-138-135-130-129
then it stalls there
but due to your anxiety you already bought more of same options at 139,137,136.
then your cash is over.
no more money to buy.
silently watch price go against you.
is what you do.
How do you beat this kind of situation?
first
fix your risk
for options
if price is above 50 rupees,use stoploss of 2%
if price is below r 50, use rs 2 as max risk.
you can use Low at Entry bar minus 2 as stoploss FOR LONGTRADE
second
rules are there to be followed.
Dont Just buy more as price drops at every 1 point drop.
instead try to buy after every half atr drop or even after 1 atr drop in price.
This reduces your headache.
Dont buy as price moves up.
see last low point and find Low +2 atr is how much.
chances are once this point of high is reached , price may to reverse.
DONT BUY NEAR THIS AREA.
C) Good entry is on a pullback as pros do.
D) How far price can move?
NOBODY KNOWS OR EVERYBODY KNOWS(ALL POOR TRADERS GUESS).
Price can move down by 2 times ATR(10) OR ATR(14) FROM CURRENT LEVEL.
IN SHORT TRADE PRICE CAN BOUNCE UP 2 TIMES ATR FROM CURRENT PRICE.
YOU CAN USE 2.5 ATR OR 3 ATR AS SPACE BETWEEN CMP AND BOUNDARY OF MOVEMENT OF PRICE.
SOME TRADERS USE 1.5 TIMES ATR. THY ARE MORE IN HURRY.
------------------------------------------------------------
UPSIDE MOVE 1.5 ATR OR 2 ATR OR 2.5 ATR
CURRENT PRICE
DNSIDE MOVE LIKELY 1.5ATR OR 2 ATR OR 2.5 ATR OR 3 ATR
-----------------------------------------------------------------
SO WAIT LEARN TO WAIT TILL YOUR ENTRY SAFE IS REACHED.
IT FAILS SOME TIMES DONT WORRY.
BETTER ENTRY REDUCES LOSSES.
IF WRONG EXIT BLINDLY AT YOUR LIMITED RISK MAXIMUM.
SAME METHOD YOU CAN APPLY TO TARGETS ALSO.
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