A brief study on nifty options for intraday

[godfather]

Guys how do you keep patience in trade and how do you trail Stoplosses?

Backtest is the safer way to understand your system and once you understand enough about your system then follow that system to find a trailing stop.

Sometimes TSL may not be good for a system because of so many factors which can be understood by backtest. If this is your early days your behaviour will also play an important role.

 

[bunti_k23]

Backtest is the safer way to understand your system and once you understand enough about your system then follow that system to find a trailing stop.

. Sometimes TSL may not be good for a system because of so many factors which can be understood by backtest. If this is your early days your behaviour will also play an important role.

Thanks for your suggestion godfather

I have backtested this system manually signal by signal, i tried everything for TSL like ATR, SAR, MA but price retraces all these indicators. i am thinking of taking Re entry in same trade by taking small loss. after all we need to avoid big loss here and go for big trades. also my signals gives good swing with momentum. let me try few more things, i will update with this.

 

[godfather]

So when you backtested on an average how many points you received/trade when it went in your direction?

If you have a win ratio of more than 50% try to adjust your stop-loss that way, If you go into detail it means, to be profitable in the long run, you need to have a positive expectancy. You can calculate your expectancy by multiplying your win rate, your average win size, and your risk/reward ratio.

Suppose the win rate is 63% your average win size is 200 rs, and your risk/reward ratio is 0.5, your expectancy is 0.63 x 200 x 0.5 = 63 rs. This means that on average, you make 63 rs on each trade with the help of your backtested data you can find this very easily right?

Now, to maximize your expectancy, you need to find the optimal balance between your win rate and your risk/reward ratio. Higher your win rate, the lower your risk/reward ratio can be, and vice versa.

For example, if you have a high win rate of 80%, you can afford to have a low risk/reward ratio of 0.25 (risking 100 rs to make 25 rs ) and still have a positive expectancy of 0.8 x 25 x 0.25 = 5 rs.

but if you have a low win rate of 40%, you need to have a high risk/reward ratio of 2 (risking 100 rs to make 200 rs) and still have a positive expectancy of 0.4 x 200 x 2 = 160 rs.

These calculations are just an example to play around with your numbers it doesn't mean you have to follow this and the market is Dynamic as you already know.

Yes these numbers are all based on zero emotions but we all know emotions are what we need to take care of first, anyways I wanted to add some value to your setup. Thank you for reading

 

[timepass]

1) The system looks like Supertrend indicator on both the sides

2) Which software are you using to generate this chart ?

3) In most of the trading softwares, you can also use + and - keys for buy and sell

4) I usually scalp banknifty options, the trades are usually upto 2 minutes in duration, so I don't keep patience in HOLDING a position. Usually, after a trade I move away, go out or if at the terminal, I play solitaire.

5) I agree with re-entry technique. In options, the price usually takes out all the stoplosses and resumes its direction.

6) Different techniques may be needed for different vix. These are the days of low vix, scalps are for smaller points. Higher vix can usually yield more points per scalp.

 

[bunti_k23]

Just a Nifty longterm view.

uptrend in longterm

immediate trend is down, big move is expected abv 19600 and below 19400

 

[bunti_k23]

So when you backtested on an average how many points you received/trade when it went in your direction?

If you have a win ratio of more than 50% try to adjust your stop-loss that way, If you go into detail it means, to be profitable in the long run, you need to have a positive expectancy. You can calculate your expectancy by multiplying your win rate, your average win size, and your risk/reward ratio.

Suppose the win rate is 63% your average win size is 200 rs, and your risk/reward ratio is 0.5, your expectancy is 0.63 x 200 x 0.5 = 63 rs. This means that on average, you make 63 rs on each trade with the help of your backtested data you can find this very easily right?

Now, to maximize your expectancy, you need to find the optimal balance between your win rate and your risk/reward ratio. Higher your win rate, the lower your risk/reward ratio can be, and vice versa.

For example, if you have a high win rate of 80%, you can afford to have a low risk/reward ratio of 0.25 (risking 100 rs to make 25 rs ) and still have a positive expectancy of 0.8 x 25 x 0.25 = 5 rs.

but if you have a low win rate of 40%, you need to have a high risk/reward ratio of 2 (risking 100 rs to make 200 rs) and still have a positive expectancy of 0.4 x 200 x 2 = 160 rs.

These calculations are just an example to play around with your numbers it doesn't mean you have to follow this and the market is Dynamic as you already know.

Yes these numbers are all based on zero emotions but we all know emotions are what we need to take care of first, anyways I wanted to add some value to your setup. Thank you for reading

I checked on historical data found out of 10 trades i am getting 5 trades in profit of avg 20 pts while risking 10 pts, i made a mistake of being in trade without booking on avg profit pts. i thought there will be more momentum to price but it retraced badly hitting my SL. so now onwards i will book profits first and if price retraces i will again re enter the trade on swing high low break. Really Entry is just only one thing, after entry how you manage trade that is all about. anyways it was my first day, it will take some more time to be disciplined in trading. Thanks for the suggestion

 

[bunti_k23]

1) The system looks like Supertrend indicator on both the sides

2) Which software are you using to generate this chart ?

3) In most of the trading softwares, you can also use + and - keys for buy and sell

4) I usually scalp banknifty options, the trades are usually upto 2 minutes in duration, so I don't keep patience in HOLDING a position. Usually, after a trade I move away, go out or if at the terminal, I play solitaire.

5) I agree with re-entry technique. In options, the price usually takes out all the stoplosses and resumes its direction.

6) Different techniques may be needed for different vix. These are the days of low vix, scalps are for smaller points. Higher vix can usually yield more points per scalp.

Hi TP,

Thank you for your insights, its really very helpfull for a newbie like me.

1 - no the core idea is taken from ST da s concept of gapup and gapdown. below is the link for discussion. the code is a hardwork of many talented coders from TJ forum itself, you can see their posts also in that thread. i just studied the concept and applied BUY SELL signals.

https://www.traderji.com/community/threads/afl-help-needed-to-plot-lines.96658/

signal perfectly comes on resistance and support so we can anytime do SAR on every signal, it will work in ranging as well as trending market.
below is the e.g in which good trades in ranging market and one last SAR trade which gave good momentum when price broke

2 - software is amibroker, i know a little bit coding cant write syntax on own but i can modify and alter conditions for buy sell rules.

3 - Yes, actually i was afraid of price execution. i didnt knew how much time will it take to trade place manually with few clicks and all, also i was not sure the price will get executed at desired price level. but prices are getting executed within fraction of secs.

4 - Great, looks like you are very sure of your setup timing. i was actually afraid of finding setup manually thats why i applied those BUY SELL entries so it would be visible to our eyes in order to avoid being afraid to pull the trigger. since everything is visible, so i know when this system will generate the signal. in mean time i do Pranayam or breathing exercises i am a spiritual person.

5 - Thanks for validating, i will definately Re entering now.

6 - As of now i am just relying on the trading signals and nothing else as these are hard coded, every time signal occurs i will definately trade and wont avoid that signal. A blind faith you can say.....

 

[timepass]

Hi TP,

Thank you for your insights, its really very helpfull for a newbie like me.

1 - no the core idea is taken from ST da s concept of gapup and gapdown. below is the link for discussion. the code is a hardwork of many talented coders from TJ forum itself, you can see their posts also in that thread. i just studied the concept and applied BUY SELL signals.

https://www.traderji.com/community/threads/afl-help-needed-to-plot-lines.96658/

signal perfectly comes on resistance and support so we can anytime do SAR on every signal, it will work in ranging as well as trending market.
below is the e.g in which good trades in ranging market and one last SAR trade which gave good momentum when price broke

View attachment 49551

View attachment 49552


2 - software is amibroker, i know a little bit coding cant write syntax on own but i can modify and alter conditions for buy sell rules.

3 - Yes, actually i was afraid of price execution. i didnt knew how much time will it take to trade place manually with few clicks and all, also i was not sure the price will get executed at desired price level. but prices are getting executed within fraction of secs.

4 - Great, looks like you are very sure of your setup timing. i was actually afraid of finding setup manually thats why i applied those BUY SELL entries so it would be visible to our eyes in order to avoid being afraid to pull the trigger. since everything is visible, so i know when this system will generate the signal. in mean time i do Pranayam or breathing exercises i am a spiritual person.

5 - Thanks for validating, i will definately Re entering now.

6 - As of now i am just relying on the trading signals and nothing else as these are hard coded, every time signal occurs i will definately trade and wont avoid that signal. A blind faith you can say.....

Is this the only chart on your screen ? I usually have the charts of index spot, futures, one call option and one put option.

 

[godfather]

Is this the only chart on your screen ? I usually have the charts of index spot, futures, one call option and one put option.

how many screens you are using?

 

[timepass]

how many screens you are using?

Usually one monitor, sometimes two. But the chart does not occupy the whole screen. At one time there are two charts, the rest in other applications / tabs / browsers.

This is put and call displayed in Opera in Kite. Spot and futures in Trade Tiger. Trading in VNS