Originally Posted by Cubt View Post
smart,
I have a qquestion, today I was day trading with options, nifty CE 6200. I entred the trade after 1pm when the nifty was holding firmly above 6225.bought at 60 and sold at 70 and made 10k profits in few mins in sudden spike. However, I bought again at 70 and there was a support arounnd 65 in nifty CE 6200 chart. So placed stop loss at 60, around 2pm there was a sudden 20 points fall in nifty due to tat nifty call 6200 came down to 56 and hit my stop loss. Later end of the day it reached 110. My question is how do we set stop loss for trading options for intraday? Should it be any percentage level from cost price,or based on nifty levels or based on nifty option chart??
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You are right...around 2:00 pm there was a deep dip which gave a doubt of a trend changing to down...many stops were hit there but market did not confirm the trend change and it resumed its uptrend. That is the time I posted that if the market now breaks the top of the day and goes up, many shorts will be trapped and they will run amuck towards the end of the session to cover and thereby adding fuel to the fire.
So nothing wrong in getting stopped out...but re-enter when the trend resumes is the way to go.
As a thumb rule, if nifty declines by more than 30 points from the top, there is a good chance of uptrend ending.....as intra-trend dips during the day rarely go below 30 points.
Smart_trade