new@TJ

[Somatung]

@Somatung sir

I'am trying to figure out that how u have calculated the target and stop loss for the first live trade e.g u have given in this thread.

Hi Bunti_k23

Let's stay with the forum behaviors: It is ok to name me Dan and thanks for your kind words you gave to many of us. :thumb: THANK YOU.

An other thing: This trade was an example to teach. No other idea behind it. So take it as that and not as THE trade. Non of us is able to reproduce such examples/trades time after time. Do never forget that, as tip sellers do argument from that side that they are able to do that all the times.

- Stop loss was posted in post 10 of this thread with the following words: Here in this trade your stop loss is your investment of 6.70 Rs plus commission you pay to the broker.

- Target: If you want to trade targets, then you will be a positional trader. Some times it will work and other times it doesn't. It told in post 20 of this thread: This trade was in no way a positional option trade, which would be an other way of option trading. Dear OMSAI, a member in this forum, is a positional trader. He can tell you enough about how it is to be such a trader. I am a hedger and directional trader in one person. But I can do that as I am educated on both sides. But that is an other topic.

- Being on page 15 of that threads means that there is still some stuff to come, even I wanted to close that thread on that moment.

Take care / Dan

 

[sharan]

Regarding lack of liquidity in a counter, sometimes it could turn out to be a boon. Sunpharma butchered today. I was planning on a 920 call for some time but did not take the trade. Had posted accordingly.

 

[bunti_k23]

Thanks dan got ur point.

 

[sharan]

My first green trade in options. However did not have any option specific strategy. Had tried identifying support levels from charts and bought calls at those spot levels. Would take time to have my own option specific strategies, if at all I garner the requisite knowledge.

 

[Somatung]

My first green trade in options. However did not have any option specific strategy. Had tried identifying support levels from charts and bought calls at those spot levels. Would take time to have my own option specific strategies, if at all I garner the requisite knowledge.

Well, that is fine and congratulation for that.:clapping: To do a pure, naked, directional, intra day option trade (Buy and sell in the same day) you do not need necessarily to know much about options. That is a fact. We than say: Nail that thing as soon as you can.

If you do such an intra day option trade in which you enter and exit in the same day, time decay is not a problem as most other option greeks are not to consider about. What you of course should understand is "Implied volatility and Historical volatility", as this even in intra day trades can have a significant affect on your option you trade with. So far we did not speak about IV and HS in this thread. So to understand IV and HV is a "MUST", even in such short time, naked, directional option trading.

http://www.traderji.com/options/66266-option-trading-danpickup-2.html#post641321

http://www.traderji.com/options/92743-options-my-way-looking-2.html#post942376

The kind of option trading you do now is a bit like: You can cook noodle soup by opening the wrapper, put all what is in it into the cooking water and after it is cooked, eat it. No need to know anything more behind that, except to know that you have to open the wrapper, where to buy those instant noodle soup and that you even can cook the dry noodles in hot water. From here you can move on if you want or you love to eat noodle soup that way and always will eat it that way. As simple as that and as legal as that. Most any way will eat noodle soup like that for the rest of there lives. Only some will take a bit more time and will even put in some fresh vegetable and meet into the soup. And finally only very few will prepare there own noodles by preparing there own dough, process with it until the dough is in shape to cut it to noodles and will prepare the meet and vegetables or what ever they more want in there soup and then cook there own noodle soup. This then will really need deeper knowledge compare to just opening the wrapper. Every body is free to do what ever she/he wants and all did finally eat "Noodle soup".

About TA: There is more than enough material around about that in the forum, so no need from my side to go further into that detail. Here just one of the great threads about TA:

http://www.traderji.com/technical-a...gies-using-technical-analysis.html#post394723

Have a nice day / Dan

 

[sharan]

@Somatung
Would like to tell you something abt myself

1. I have a firm for the last 18 yrs into development in the domain of neural network and artificial intelligence. I am not and will never be a full time trader. Trading for me is at best a complimentary income (or expense).. I cannot devote more than 1.5 hrs per day to this. Not necessarily during MKT hrs.
2. If you see my previous posts you would find me mentioning that people bleed the most in options. Then why choose options esp when i myself admit that my knowledge is at best bookish? In equities if I start trading in 50 to 100 shares the returns (+ or -) would not arise my interest. Though that is the ideal way to start. Futures I cannot take huge losses. I know options are extremely complicated and would take years to get acquainted with but here I know my Max loss. Also I can do futures with strict SL.
3. If you see my order the 820 call intra day low was 11
45 and my entry was at 12. At that time spot was at 791(a level I had planned to enter). But could not muster courage for 1 lot future buy. Though I had planned meticulously to buy 3 lots there. When the time came I chickened out and ended buying 1 lot of options.
4. Paper trading for me is not an option because I take the mkts as a psychological game more than
anything else. Paper trading of most methods will show positive results.
5. I have a mm plan no matter how rudimentary it is. Have already defined Max loss (overall) that I will take.
In case there is something else which should be on my priority and isn't pl mention so that I can inculcate the same. I sincerely maintain that I am here to learn , from anyone willing to help.

PS I have come across a thread by healthraj. Have finished pratap's thread. Will go thru all the threads you have cared to mention. Time is but a serious issue.

 

[Somatung]

@Sharan

Good to see you have your firm. Congratulations from my side to that fact. :thumb: My example on "Noodle Soup" was made because I am absolute clear about how time consuming trading or adding knowledge in trading can/will be. As you spent most of your time for what you do in your firm, others spend most of there time by what they do in trading. I know that nuances and so the noodle soup example was made with the three nuances which do reflect that fact. The end product is always called a noodle soup, as the end activity is always called "Option trading", or in your situation "Development in your specific domain".

Only the one who spent most of his time doing one of those activities will become a specialist in it compare to those who spent less of there time in that specific activity.

As long as people really do have that in mind, accept it and not go with the thoughts: Aha, three days school about option trading will make me as good as the once who already spent ten years in it, only then it is understood and specially accepted that this is reality and the rest is a dream and lying to them selfs. You do belong to those who are very clear about that fact and I am happy to read that. :clapping: (Have and still do see many times that it is not the case with all who come into the forum what ever derivative they want to start trading with)

Coming to your post:

1. If you not can spend time during market hours, be careful what you do in trading. You can place limit orders, means you become a positional trader. Here you still need to be at the desk when market opens, check during the day if you are filled or let you be informed about it and you should be at the desk again before market closing.

2. As mentioned in the example: You can do it this way or you can do it on other levels. No fixed rules about that. So: If you want to trade intra day directional option trades, this must not be complicated. So far I have mentioned what you for sure need to know. You will most probably need to add more knowledge about how otm, atm and itm act according to the underlying and then do some test with it to see the differences in each option with real numbers. SL you understand or you do it your way, so no comment from me on that.

3. Experience will devolve this over time.

4. Fine.

5. Point one and two should have answered that.

Healthraj thread is fine. You not even need to start reading it from the begin, as he has changed some of the rules and ways he is trading know. Start here http://www.traderji.com/trading-diary/88670-nifty-options-trading-raj-500.html#post978163 and follow it when you reached the actual intra day post. That will do and you will understand what is posted in that thread.

Take care and enjoy the day

 

[sharan]

Hi Somatung,
Does Max pain become relevant only during expiry week, or should be checked all the time. Also if you do not mind me asking : are you a very successful options trader? Just wanting to know. No ill intended.


Thanks in advance.

 

[Somatung]

Hi Somatung,
Does Max pain become relevant only during expiry week, or should be checked all the time. Also if you do not mind me asking : are you a very successful options trader? Just wanting to know. No ill intended.


Thanks in advance.

@Sharan

Max pain is a tool you can use if you want. Doe's it help? It is like any other tool. It will work some times and in other times it will not work to its perfection. It is surely a tool which can help traders, if option or if future traders, who are eager to predict market levels and set there targets with the help of such a tool. Test it by your self and see if it makes sense to the way you want to trade options, as what works for others may is of no use for your way of trading. My system works with out that tool, as I no more hang up my trades on such tools, even I look at them. If market closed where Max pains shows it, fine and if not, no problem as there are other ways to trade the market and not by targets. Here a little help to that topic: You can start with standard deviation and add that tool and combine them. You even can use Fibos and other maths in combination with that tool. So endless variations you can test and check

About me and my trading past: http://www.traderji.com/introductions/95449-new-member-trading-world-2.html#post1002823 / and Yes, I finally have managed to come to the level to make money with options and futures on a permanent level, which even with the knowledge I have, toke me quit a while. Just to inform you: No information will be released about how I trade my personal system. So it would be useless to ask about it. I do help already in many other ways and that should be more than enough to make any of you to be able to trade options with permanent decent profits.

Have a nice evening, as I now will check out of the forum for today.

 

[sharan]

Hi Dan,
Is there any way I can plot the option price (including multiple strike prices) with the underlying value. Want to view something on those lines in intra day and daily time frames.
Have a nice weekend.