Gamma based range & trade

toughard

Well-Known Member
#71
Delta ranges between 0-1.Gamma is seen within Delta and ranges between 0.03-0.07 to 0.97-0.93.Thus,even when nifty move past 0.93/0.97 on upside or 0.07/0.03 on lower side would lose momentum or would become static as Gamma would be zero there.

The idea of this thread is to capture the broad range for the series using Gamma
& IV of last day of previous expiry and Close..Nifty is expected to trade within the range & extremes are not expected to be breached..

Further,the midpoint of this range play a critical role of trend decider.Nifty above this would be positive and below it would be negative.MACD divergence tick(macd histogram),MACD divergence cross(macd line crossing signal line) & MACD would determine the position of nifty above or below the midpoint..

Hope the contents are not too loaded??:)
look like another kind of pivots to me but would like to see your trades/paper trades based on your inputs, can you post them?:) as I would like to see how you managed your entry and exits at the mentioned levels
 

toughard

Well-Known Member
#72
look like another kind of pivots to me but would like to see your trades/paper trades based on your inputs, can you post them?:) as I would like to see how you managed your entry and exits at the mentioned levels

hi it look like you missed my question here:(
 
#73
look like another kind of pivots to me but would like to see your trades/paper trades based on your inputs, can you post them?:) as I would like to see how you managed your entry and exits at the mentioned levels
Now broad range is 6510-6950-7390.

Thus,the trade would be sell 7400 call & sell 6500 put.This is a basic option selling idea..

Now,since nifty is trading below midpoint 6950,one could see pressure building on 6500 put.

Thus 4 options spring up

1.Just sell 7400 call

2.Sell 7400 call & 6500 put

3.Sell 7400 call, Sell 6500 put & Buy 6900 put.

4.Sell 7400 call & Buy 6900 put

The status of above if taken on 24th..is as given below along with present status:

1.Sell 7400 call(May)@69 : 47.........+22

2.Sell 7400 call(May)@69: 47
Sell 6500 put(May)@105:153
........................................................-26

3. Sell 7400 call(May)@69: 47
Sell 6500 put(May)@105:153
Buy 6900 put(May)@252:339 (stoploss 6750 spot)
............................................................+61

4.Sell 7400 call(May)@69: 47
Buy 6900 put(May)@252:339
............................................................+109
 
#74


Gamma range strategy:

This strategy is put up with calculating the broad range & midpoint.The extremes and near extreme points indicative of low risk zone & points around midpoint as high risk zone..Midpoint act as trend decider..Nifty above it is positive & below it is negative..

7820-8250-8680 is broad range.Not required that entire range is tradeable..

7820-8035 would be low risk zone on downside & 8465-8680 would be low risk zone on upside..

Low risk zone is a zone where one can accumulate long position/short position as the case may be..if it happens within 15-20 days of the series..

1. Intention is to trade less and earn more profits..& Low risk..

Thus,trade is as follows:

1. First week trade towards gamma midpoint..
2. Trade when nifty lands near or inside low risk zones either on upside or lower side
3. Last week trade towards next series gamma midpoint

One can continue the above strategy further with risk also..if one requires..

2. Intention is to trade more with Higher risks...

Other than trades quoted above under low risk trade,one can continue trading based on nifty above or below the gamma midpoint..One has to use their own trailing stoplosses & stoplossess..Gamma range U1/U2 or Gamma range L1/L2 are likely targets on upside or downside accordingly..EMA crosses also gives potential targets..

Make use of 3 MACD indicators to judge whether nifty would remain above or below gamma midpoint..
1.MACD divergence tick(Histogram positive/negative)-8311
2.MACD divergence zero cross(MACD line going below/above Signal)-7550
3.MACD zero cross(MACD line going below or above zero line)-7256

2 & 3 role is important.1 can become negative & later change to positive & would sustain above midpoint..
But,when MACD divergence zero cross point is closer,then one can expect nifty dipping below midpoint and then making the cross..

Demarks Monthly Projections are as under:-

Tolerance level High:8439

Tolerance level Low:8257

Normally,as long as Daily pivot(8324) is greater than Monthly Pivot(8126),nifty would tend to move towards 8439 & would tend to sustain above 8439..Nifty is getting ready to shoot up towards & beyond 8439!!!!

During weakness,nifty would tend to come below Tolerance level High.Break of Tolerance level(8257) would signal deep fall towards 8126.....

Did you notice that Gamma midpoint(8250) & Tolerance level low(8257) are very close!!!!
 
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#75
Make use of 3 MACD indicators to judge whether nifty would remain above or below gamma midpoint..
1.MACD divergence tick(Histogram positive/negative)-8372
2.MACD divergence zero cross(MACD line going below/above Signal)-7583
3.MACD zero cross(MACD line going below or above zero line)-7131

Demarks Monthly Projections are as under:-

Tolerance level High:8439

Tolerance level Low:8257

Normally,as long as Daily pivot(8342) is greater than Monthly Pivot(8126),nifty would tend to move towards 8439 & would tend to sustain above 8439..Nifty is getting ready to shoot up towards & beyond 8439!!!!

During weakness,nifty would tend to come below Tolerance level High.Break of Tolerance level(8257) would signal deep fall towards 8126.....
 
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#76
Make use of 3 MACD indicators to judge whether nifty would remain above or below gamma midpoint..
1.MACD divergence tick(Histogram positive/negative)-8393
2.MACD divergence zero cross(MACD line going below/above Signal)-7638
3.MACD zero cross(MACD line going below or above zero line)-7036

2 & 3 role is important.1 can become negative & later change to positive & would sustain above midpoint..
But,when MACD divergence zero cross point is closer,then one can expect nifty dipping below midpoint and then making the cross..

Demarks Monthly Projections are as under:-

Tolerance level High:8439

Tolerance level Low:8257

Normally,as long as Daily pivot(8329) is greater than Monthly Pivot(8126),nifty would tend to move towards 8439 & would tend to sustain above 8439..Nifty is getting ready to shoot up towards & beyond 8439!!!!

During weakness,nifty would tend to come below Tolerance level High.Break of Tolerance level(8257) would signal deep fall towards 8126.....
 
#77


Other than Gamma based trades as detailed in previous posts,would like to introduce Traders Delight..

The trade would essentially include the study of Ichimoku & my reversal points..The idea is when reversal take place,expect nifty to react and touch or break certain points..Would contain likely targets also on upside..Trade would be based on triggers & better to close as soon as targets are reached..

The above chart indicates:-

If trend decider becomes negative,would test minimally 9ema/9ma point..
If 9ma reversal point getting negative would result in nifty testing Leading Senkou-A
If 20ma reversal point becomes negative,would break Leading Senkou-A & test Kijun-sen.Would test Lead Senkou-B also..

As of today,pointers are positive & thus would expect support at 8236/8328 on downside & nifty would tend to move towards 8453..
 

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