directional option trading for beginners

[niftytaurus]

Hi All traders friend
I am going to start this new thread for pure directional option traders.There are so many brilliant threads about strategic trading,hedging trading etc..but i have noticed many traders are still into directional option trading.
I am also student of markets & learning about trading...so my aim is to get a platform where beginners can ask their queries about directional option trading & I request all senior members ..please please please try to share our knowledge ,experience here & kindly reply on those queries...
this thread is for learning the directional option trading....please share ur knowledge & ask questions which is related to PURE DIRECTIONAL OPTION TRADING...I have seen many great teachers here ..please share ur option trading knowledge here..
Beginners pls dont ask for tips etc..this thread is for learning...you learn from this thread & be self confident and catch your fish yourself ( a initiative start by Saint bhai) ..so please senior help us to catch that fish in option trading

 

[teja14]

Dear Niftytaurus,

I think first it is better to express your views on directional option trading and why it is better than strategic and hedging. If it is good then seniors will automatically attract to this thread and they will give their valuable guidance to you and other members.

One more thing i would like to know from you,how you know most of the traders are directional traders?

Any how you are eager to learn, i hope and wish you may catch more fishes on your own.

 

[niftytaurus]

Hi
I have been learnig about option from last some monthes...What general thing I understand ,I would like to share.Its VERY BASIC but I am sharing it as this thread is for beginners who are starting their journey in option trading .some very basic but imoprtant things to learn..


options have so many secret advantages :-
it limit your losses .It gives you outstanding leverages with limited risk.high returns..its has all benefit but remember like all miracle drugs ,options must be used with proper & prudence care.If you overdose ,options can be dangerous.

please get the proper education of option trading .To be a successful option trader ,you must get the proper education.without education, option trading must be very dangerous.try to read some books & some wonderful threads in traderji.
try to take advise with the traders who are doing it profitably from a long period.You get insight which you can not get into books..a practical knowledge.

to gain confidence ,do paper trading first.In that way you can make errors without losing money & learn from your mistakes without losing money.If you are doing some high risk trade,so you get comfortable with it by doing it on paper first.You also get pitfalls of that trade.

For strategy trading ,you can go through so many wonderful threads here about strategic option trading..But as this thread is only about directional option trader...we will discuss only those things here.

after doing a proper paper trading ,and learning..you can start with buying option with 1-2 lot...but dont plunge into trading big position in starting.

Do your homework before investing...analysis your option & monitor your positions..

those are some basic ..hope it will help you...will write more in next post

 

[niftytaurus]

Dear Niftytaurus,

I think first it is better to express your views on directional option trading and why it is better than strategic and hedging. If it is good then seniors will automatically attract to this thread and they will give their valuable guidance to you and other members.

One more thing i would like to know from you,how you know most of the traders are directional traders?

Any how you are eager to learn, i hope you may catch more fishes on your own.

Hi Teja
I did nt say that directional option trading is better.did I ? Its all depend on individual traders ..that which strategy he /she is comfortable with...I dont beileive in this is better or this is worse..its all about personal choices...we have so many threads about strategy trading,but dont have any for directional traders..
I didnt use word "MOST",I said many traders do directional trading.there is no official statistics about it.But i have gone through so many threads in option section.& i found many traders who does directional option trading.

I am nt eligible enough to express my views about it.thats y i started this thread.I have read in so many articles & books that option buyers are always in loss & option selling is profitable.But fortunately & unfortunately all books which written about option trading are by foreign writers & considered Us or Foreign markets.I have reade one book from an indian writer ,whose said that in indian markets option buying should be considered.I have read some views from members here only who also suggest that in indian market buying option can be also profitable.as indian markets are very different & less mature than Us Markets.our markets are more volatile.most important thing our market is largely move by FIIs.So they can effect our market very easily.Plus usa markets have so many option product & margin fascilities which we dont have.

so I would like to know all senior members & who has done option trading profitably ..please give your views about it ..so we beginners can know about real fact about indian directional option trading ..as not all answers we can get from books..real experience from traders who get profit consistently can enlighten us better..

 

[amritak1952]

DEAR FRIEND,

thanks for sarting a new tread i fully agree with your suggestion of paper trading but all said and done till you are not emotionaly and financialy envolved one always make mistake secondly according to my judgement all naked optional call are dengerous it is my openion i can be wrong also still wait for your feedback
thanks amrit

 

[niftytaurus]

DEAR FRIEND,

thanks for sarting a new tread i fully agree with your suggestion of paper trading but all said and done till you are not emotionaly and financialy envolved one always make mistake secondly according to my judgement all naked optional call are dengerous it is my openion i can be wrong also still wait for your feedback
thanks amrit

Hi Amrit
you are right .when we involve real money ,our behaviour change.Risk & greed came into play and our greatest enemy ego gets in the way.But through paper trading for some time ,you can test ur trading plan & strategies.I know we behave rationally when paper trade but behave irrationally when real trade with money.so one of the greatest battle for option trading is Maintain your rationality.dont do paper trading for much time.real learning came from real money.after paper trading ,you can start with small lots.
ya they can be dangerous.I am nt right person to answer this,that's y i asked opinions of senior traders who can give facts about it.
thanks

 

[niftytaurus]

Build a Plan

Before trading you must make a proper plan .You should ask those question & include those
answers in your plan
1) what stock,index or underlying assets should I be considering for trading?
2) What direction do I feel comfortable trading in?
3)did I check the news on the underlying asset I am going to trade? Ex Any company result of those stocks, announcements etc which afffect my trade.should i wait till announcement or take entry? for example if your underlying asset is bank nifty , rbi policy annnouncement can effect your trade.
4)did I check charts & other technical indicators before entering a trade?
5)what risk profile & strategy do I feel comfortable with?
6)for each trade,what is my entry point,exit point & time of exit?
7)do i know my risk,reward & breakeven point?
8)What price am I looking for to execute my trade?
9)where will I take my profits & where is my stop loss?

If I miss anything,please add
thanks

 

[wizard]

Which Premium to look for ?

 

[sudoku1]

http://www.traderji.com/derivatives/88644-n-i-f-t-y-compass-26.html#post886336

 

[DanPickUp]

http://www.traderji.com/derivatives/88644-n-i-f-t-y-compass-26.html#post886336

@Sudoku1

Why are you posting all over the forum the link to your thread? We know that you run this thread, so what is the purpose of this getting very, very boring action over and over again??

DanPickUp