Gamma based range & trade

[umash2000]

@Somatung

The trades were for educational purpose and was done based on certain expectations from the study.But,it did not work and have removed from the system.Have trimmed it and its usage to be more simple..

 

[Somatung]

@Somatung

The trades were for educational purpose and was done based on certain expectations from the study.But,it did not work and have removed from the system.Have trimmed it and its usage to be more simple..

As you do specially directional option trades, what other solutions you think about? Market was up, but you showed short calls and long puts. Why? There was an other guy in the forum which also always gave short calls, even if market went up.

 

[umash2000]

@Somatung,

Selling of calls was a wrong trade as it was away from what i intended to do under this study.Brought in value option aspect and thought 6200 call eventhough ITM would shed its price.It did not happen.But was profiting from naked options trades.

Since MACD divergence cross was about to become negative expected minimum dip to 6400-6450..where I thought of closing the positions of both puts and Selling of calls.But,nifty managed to move up strongly negating the expected cross.This was further motivated with certain indicator moving within the range.
Hindsight realised that it did not work..

Loaded wrong assumptions have been removed..

 

[Somatung]

@Somatung,

Selling of calls was a wrong trade as it was away from what i intended to do under this study.Brought in value option aspect and thought 6200 call eventhough ITM would shed its price.It did not happen.But was profiting from naked options trades.

Since MACD divergence cross was about to become negative expected minimum dip to 6400-6450..where I thought of closing the positions of both puts and Selling of calls.But,nifty managed to move up strongly negating the expected cross.This was further motivated with certain indicator moving within the range.
Hindsight realised that it did not work..

Loaded wrong assumptions have been removed..

I do not know if you are able to test your used indicators through back testing, but I strongly recommend to do so before moving on. As you are a short time option trader, time frames of three to six months will be enough to test.

Somatung

 

[umash2000]

As you do specially directional option trades, what other solutions you think about?

The review and changes proposed in my trades:

1.To avoid selling of options as of now.

2.To avoid trading in options of present series near expiry..

3.Have included daytrade along with positional.To be in the market with reduced exposure and thus the risk..

4.To have stoploss for positional trades..

Nothing wrong with indicators.Its the trade which has to be reorganised to reach the goal taking into consideration the risk involved..:thumb:

Would thank Somatung and traderji forum for followup and raising pertinent questions.It helps a lot to setright the house..

 

[umash2000]

Nifty trades within the broad range for this series 6270-6715-7160

Just watch out for Daily MACD div.cross.Its positivity would make nifty sustain above 6715.Its negativity would push nifty towards 6715 & below it also...

What is the position of broad range for next series as of now??
Its 6410-6895-7380 !!!!!

Now lets bring in Chikou span & Kumo gap concept here along with MACD..

MACD is +106 & Kumo gap below 100 as of now..However,Kumo gap is in the process of increasing and is expected to move beyond 100 only next series..Chikou span expected to come near 6500-6525 during that time..

Implication? One could expect nifty to dip towards 6600-6550 either this series last week or next series beginning & then bounce up again towards 6895...

The above is what I call Kumo Long shot..Watch out & lets see whether it happens..

However,remember that option expiry are risky!!!This is only one more angle or enhancement to Gamma range trade.If one is happy with simplistic range,trade accordingly..

 

[umash2000]

Daily MACD divergence cross became negative today.Thus,nifty is expected to break 6715 shortly..20ma to cross 20ema..Thus,nifty expected to seek 20ema(6653) zones..However,Max option pain at 6700 could give support initially.Break of 6700 would lead to 20ema point..

Resistance at the top is seen at 6760-6800..Nifty to get into Volatile phase.Watch out for Big Moves!!!

 

[umash2000]

Nifty breaks 6715 and moves down towards 20ema(6655).20ma cross 20ema today..as expected..

Resistance seen at 6720-6750 on the top now and nifty expected to move down towards 6656/6626...

Gamma range for May series as of now is 6300-6785-7270..

 

[umash2000]

April series again saw nifty stuck within the broad range of 6270-6715-7160..6715 midpoint acting as critical trend indicator..

Had now tried this for the past 7 months..

Broad range for May series is 6510-6950-7390.Thus,expect nifty not to breach 6510 & 7390 on either downside or upside & 6950 would act as critical trend decider..

Expect downside next week and obviously its for grab..for immediate target of 6950..

Using the above methodolgy,have now incorporated in stocks.Would like to put forth 2 stocks to start with as a test..Its Ambuja cements & Hindalco..

Ambujacem range is 410-270-130.Strong support seen around 200.Target 270+

Hindalco range is 250-170-90.Strong support seen around 130.Target 170+ -

 

[Options_Trader]

@Somatung,

Selling of calls was a wrong trade as it was away from what i intended to do under this study.Brought in value option aspect and thought 6200 call eventhough ITM would shed its price.It did not happen.But was profiting from naked options trades.

Since MACD divergence cross was about to become negative expected minimum dip to 6400-6450..where I thought of closing the positions of both puts and Selling of calls.But,nifty managed to move up strongly negating the expected cross.This was further motivated with certain indicator moving within the range.
Hindsight realised that it did not work..

Loaded wrong assumptions have been removed..

Nice thread. Are you consistently profitable using these methods.