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[nac]

Dear AW10,
I m posting here few questions regarding F n O. i know nothing about these instruments , therefore i read about them in investopedia.com and NSE modules which are very helpful. Now after reading theoritical part, i have a few practical questions..i m very thankful to Columbus for providing me his future trade sheets...

1. what is the minimum money / margin required for 1 lot of nifty/mininifty futures and similarly for options ? for example a newbie can short or buy a share worth just 100 rs to check ...and even trade goes against u . will loose only 4-5 rs. so he is just risking 4-5 rs.

2. my brokerage is .03% in FO, it depends on the turnover ? if yes.. then 1 lot of nifty means around 5300 x 50 = 265000 ....x 0.03% both leg = 180 rs + other charges as well...? is the brokerage different for intraday and delivery as in shares. or is it same..?

3. most people trade in FO just as in shares..ie intraday., its true ?
is it dangerous to take these contracts home ?..i mean till expiry or for few days ..

4. what is less risky for a newbie to just gain experience , nifty/ mininfty futures or options ? i just want to try it once ..

5. in NSE option chain..what is open interest/ change in open interest ?

6. Theoritical Example of FO

I just help you with the answers I know. Examples will be answered by those who got knowledge about it.

1. Span margin differ from day to day. Its based on %, calculated with previous day close. For nifty its approx. 26k/lot, for mini - 13k/lot
2. Yes, brokerage is same. No matter you hold your position for a month or cover it on the same day.
3. Many trade in derivatives. But still in terms of qty cash is most traded. Regarding risk, AW10 will answer...
5. You would have read it in investopedia about this OI. Some use this as indicator to speculate the trend. It means no. of contracts are not closed on a particular day.

 

[annu]

itna sannata kyo hai bhai!!!!!!

no one is here to tell some thing . kuch khatte, kuch meethe anubhav.

best regards

annu

 

[AW10]

I just help you with the answers I know. Examples will be answered by those who got knowledge about it.

1. Span margin differ from day to day. Its based on %, calculated with previous day close. For nifty its approx. 26k/lot, for mini - 13k/lot
2. Yes, brokerage is same. No matter you hold your position for a month or cover it on the same day.
3. Many trade in derivatives. But still in terms of qty cash is most traded. Regarding risk, AW10 will answer...
5. You would have read it in investopedia about this OI. Some use this as indicator to speculate the trend. It means no. of contracts are not closed on a particular day.

nac, jlo001 has already replied to your questions. I will just pickup this question

4. what is less risky for a newbie to just gain experience , nifty/ mininfty futures or options ? i just want to try it once ..

In my view, for newbie, it is important to learn trading at as low cost as possible. I.e Risk as less as possible. They should forget the dream of making crores till the time they have learnt trading profession. So, if one has to risk less, then Stocks is the place to start with. You can place a trade for as low as 1 rs risk.. cause u can trade 1 qty of stock. That is not possible in F&O due to contract size limit.

Fundamental rule of trading is to decide Risk as %of account or Risk in Rs. terms for each trade, each day, each week, each month, each year.... And stick to it. Otherwise, we trader always run the risk of giving too much of profit back to market.
So say if you want to take 1000 rs risk per day, then split this risk amount in number of trades your system is genrating per day.. and limit your risk based on position size.
e.g - if u get 3 signals per day, then per trade risk = 300 approx. If u trade NF then u shd have Stoploss of 6 points (as given by your system and price action, not by your whims and fancy). If you trade stock, and signal comes with stop of 2.5 Rs. then take 120 lot etc. If you scalp, with 200 trades per day, then just limit the risk to 5 rs per trade i..e with NF 10 paise for 1 contract givien 10p*50 = 500p = 5 Rs. You can simulate same for stocks.

Basic rule of risk mgmt is , never loose as much in one timeframe, that u can't make in same timeframe. So if your average return per day is 1000 rs.. then don't loose more then 1000 rs in one day (infact, I tend to be more conservative in this and use the ratio as 500 rs loss for 1000rs gain per day).
In this business, if you can control your losses, then profit is just matter of being in the game for long enough. Else many months of happiness can be ruined in 1 or 2 days.

Happy Trading

 

[AW10]

Let me put something to think, discuss and let our ideas flow ..
As we are heading into Expiry week..we traders are always expecting something or other from it. We see this every month.. So

- lets share some idea/ experience/ observations on expiry weak behaviour
- how can we trade it profitably
- what kind of sytems can be developed for this
- etc etc..

Happy and ejoyable trading.

 

[Satyen]

Let me put something to think, discuss and let our ideas flow ..
As we are heading into Expiry week..we traders are always expecting something or other from it. We see this every month.. So

- lets share some idea/ experience/ observations on expiry weak behaviour
- how can we trade it profitably
- what kind of sytems can be developed for this
- etc etc..

Happy and ejoyable trading.

Very Nice dear AW10 will be watching closely to learn new ideas ..........

 

[AW10]

Let's make it more clear :

If I know, that the newbies use a certain system, why should I not take the contraries and take my position there and wait, until they make a mistake ( and they will ) and make a living out of that ??

Sorry for the delay in commenting on this post from DanPickUp. But I found it quite thought provoking.

In my opinion, it is more or less universal truth, that in long run, only stronger person wins in boxing ring, competition, sports, busienss or trading. If I need to win in boxing, then odds of success are against me if I challange Tyson..so I need to find someone weaker then me to improve odds of success. Similarly, if I open a business take-on competition with coca-cola, I am gonna loose. Traslating it to trading, when I place a buy order, I need to know who is on the other side of the trade. Is he novice or professional. If I can find it out that person on the other side immature, novice, emotional trader, my odd of success are greater. Knowing kind of mistakes / or kind of intelligence novice trader demonstrate, I can certainly take position against them and win in long run.

eg- newbie gets emotional and they jump in to buy after market has already gone up and near the resistence.. or they sell after market has already fallen and near support. i.e. novice sell near support and buy near resistence.
And what does common sense trading says ? We should sell resistence and buy support. Not predict that resistence will be broken and will become support. Let it become support before we buy at that level.. So just by sticking to this simple fundamental concept, if we buy near support, we are buying from a novice seller. A professional, who is successful over a long period will not sell at the support otherwise they can't survive in the game for long by selling supports.

Similarly, very first system noivce use, is moving average crossover. And it should not be suprised that why MA crossover system has such poor success rate. Professionals easily get MA criss-crossed many times and catch novice traders. So to survive against such professional act and novice act, i need to have different edge (of course which is tested and proven to be profitable).

One of my trading belief is, If I can't identify professional money on the chart, then probably I am the dumb money. Simliarly, if I can't identify Novice traders on the chart, then probably I am one among them.
And ofcourse, my P&L will reflect the P&L of group that I belong too.

Just some of my thoughts.. What do you guys think ? Any new thoughts.

Happy professional trading

 

[AW10]

Guys, came across nice post from TT (as always) on monthly behaviour of nifty. Sharing the link here.

http://www.traderji.com/futures/38083-nifty-key-levels-day-traders-25.html#post429066

 

[annu]

AW bhai whenever you comes in full action , every time there is a new thing to learn for me. like close watch on novice activity and professional activity through chart . don`t know how you people do this only by looking on the chart . that`s the reason pyramiding in every profession . very few reaches at the top. survival chances are more for them who are disciplined with tight money management rules , confident , humble , innovative , always continue in the process of learning.

just my thinking

best regards

annu

 

[N.corp]

Short interest ratio?

Guys, am new to trading.
I do understand that we call gauge the quantum of short positions taken, by using "short interest ratio'. Nasdaq provides it on its website.
Where can I find this ratio for NSE stocks?
Also, am using websites like moneycontrol and rediff for information; and they are good. Yet like a mortal that I am I want more, experienced brothers suggest something better and exhaustive.
Jai Trader.

 

[AW10]

Hey annu, we all have been (or still we are) newbee /novice/ dumb money. So it is pretty easy to find out it on chart..
Don't you remember the trades where we bought at the top and sold at the bottom just to see market reversed on next bar.

Only difference then as novice, even if we bought at support zone, and prices crashed, that support became resistence, we used to keep hoping and praying. As a pro also there will be time when mkt will go pass the support zone and stop us out.. but we learn to change our opinion quickly as per the latest conditions of market. If required, then learn to re-enter. Lets not forget, there are many more smarter people out there in market and we maybe novice in front of them.

Happy Trading and have nice weekend.