Hello Friends,
I got a few PMs yesterday from our fellow colleagues asking me to give a live-commentary on how the system has been working. I am going to use today's day to provide the same.
I would like to 1st say that this system is so new that its no use to judge it so fast. So anyone reading this for guidance should not use this system as proof. This is just something I put together keeping my risk profile and aims in mind. I have borrowed a lot of advice from Ghosh Sir and Dan on this forum. They have helped me a lot , as has various OPTIONS guides. I did give myself 1 month to just study options to understand the greeks etc.
So , please do not use this system as any proof - its just my effort and it can also fail
...With that out of the way, here is my day and how it panned out.
Ground work for the day
1. Check Ghosh Sir's resistance and support levels to approximately understand the range for the day.
2. Check if any news is due today - Bajaj Auto results (Important for NIFTY)
3. Check global cues (though they are a bit irrelevant currently, but I just want to keep that habit up)
Market opening
I follow Ghosh Sir's principle to decide what trend I want to follow for that day - Today's trend was down, for obvious reasons. Markets fell from the top and stayed down for a while.
System signals
A Buy was generated around 10:15 ish. I was busy with some work (I have to keep a look at that too, its a startup so I cant ignore) so I choose to ignore it. My mind was pre-occupied plus I was wanting to wait till bajaj auto results hit the tape. I was still thinking bearish today due to the opening and how things were till 10:30.
Bajaj auto results disappointed and so did their press conference w.r.t guidance. Markets started coming off from 5740.
Trade 1
Here I use the classical top-bottom formation to get into the trade. Lower tops lower bottoms and I bought the JAN 5800 PE @ 101 approximately. Then I think I was just lucky, the market tanked. Within 10 minutes the call was at
130 levels. CLosed the call on the biggest UP candle.
Trade 2
Now the bearish trend was very clear, and since I had taken profits, I wanted to find another entry point on the downside. Now the same logic was applied. top-bottom formation. But this time I did not wait for 3 tops - 3 bottoms. For my 1st trade of the day I want to confirm the trend so I enter on the 3rd such formation. Thats just my system, it fails to catch some signals also, but this give me comfort that the trade I enter does not suddenly reverse.
Anyways - at this point I was looking at how the pullbacks were, they are not strong so on the 2nd lower top I shorted again. Bought the same 5800 PE call at 127 and then closed at 146. Closed on pullback signs. Pullbacks were failing.
Trade 3
Still an hour of trade to go - and trend is firmly down, pullbacks were failing. I had taken good profits on 2 trades. Remember the support for the day was already broken. When such steep fall happens, the pullback has to be equally fierce and strong , it wasn't. So I was encouraged to take the final day trade on the downside. I didn't want a big trade so I just took 4 lots this time. So again using the same logic , 2nd break below and I went short.
Bought the same 5800 JAN PE @ 137.4 and closed at 150. I had initially wantd to close at 148, but I cancelled that order seeing that pullback was again failing. But I was afraid so I soon closed the call at 150. The day high for the call was around 155 I think.
So thats the commentary for the trades.
I've attached both the chart and the trade sheet. Please bear with me that I've again attached and given links. I'm sorry if this is inconvenient. I promise that later times I will use tools that are more easy for you.
day ended with some 60 points gains.
MY SYSTEM IS NOT PROVEN
IN the end I want to say that - This is a UNTESTED SYSTEM - just 1 month of dry runs and 3 days of real-time tests does not make a system. I think I have been very very lucky for these 3 days. Please do not take this as any proof of success. I am just telling you how I think since you guys asked me.
There are more senior guys on the forum who have been doing this for years (Ghosh Sir and Dan are the guys you should go to for your help and advice). I am learning and using their advice to build my system. I promise you to share my failures as and when they come, because they are inevitable.
Sorry for such a long post.
The chart here (there is a typo in the chart - calls are 5800 PE, not 5600 PE)
http://img155.imageshack.us/i/realtimetest19thjanopti.jpg/
I got a few PMs yesterday from our fellow colleagues asking me to give a live-commentary on how the system has been working. I am going to use today's day to provide the same.
I would like to 1st say that this system is so new that its no use to judge it so fast. So anyone reading this for guidance should not use this system as proof. This is just something I put together keeping my risk profile and aims in mind. I have borrowed a lot of advice from Ghosh Sir and Dan on this forum. They have helped me a lot , as has various OPTIONS guides. I did give myself 1 month to just study options to understand the greeks etc.
So , please do not use this system as any proof - its just my effort and it can also fail
...With that out of the way, here is my day and how it panned out.Ground work for the day
1. Check Ghosh Sir's resistance and support levels to approximately understand the range for the day.
2. Check if any news is due today - Bajaj Auto results (Important for NIFTY)
3. Check global cues (though they are a bit irrelevant currently, but I just want to keep that habit up)
Market opening
I follow Ghosh Sir's principle to decide what trend I want to follow for that day - Today's trend was down, for obvious reasons. Markets fell from the top and stayed down for a while.
System signals
A Buy was generated around 10:15 ish. I was busy with some work (I have to keep a look at that too, its a startup so I cant ignore) so I choose to ignore it. My mind was pre-occupied plus I was wanting to wait till bajaj auto results hit the tape. I was still thinking bearish today due to the opening and how things were till 10:30.
Bajaj auto results disappointed and so did their press conference w.r.t guidance. Markets started coming off from 5740.
Trade 1
Here I use the classical top-bottom formation to get into the trade. Lower tops lower bottoms and I bought the JAN 5800 PE @ 101 approximately. Then I think I was just lucky, the market tanked. Within 10 minutes the call was at
130 levels. CLosed the call on the biggest UP candle.
Trade 2
Now the bearish trend was very clear, and since I had taken profits, I wanted to find another entry point on the downside. Now the same logic was applied. top-bottom formation. But this time I did not wait for 3 tops - 3 bottoms. For my 1st trade of the day I want to confirm the trend so I enter on the 3rd such formation. Thats just my system, it fails to catch some signals also, but this give me comfort that the trade I enter does not suddenly reverse.
Anyways - at this point I was looking at how the pullbacks were, they are not strong so on the 2nd lower top I shorted again. Bought the same 5800 PE call at 127 and then closed at 146. Closed on pullback signs. Pullbacks were failing.
Trade 3
Still an hour of trade to go - and trend is firmly down, pullbacks were failing. I had taken good profits on 2 trades. Remember the support for the day was already broken. When such steep fall happens, the pullback has to be equally fierce and strong , it wasn't. So I was encouraged to take the final day trade on the downside. I didn't want a big trade so I just took 4 lots this time. So again using the same logic , 2nd break below and I went short.
Bought the same 5800 JAN PE @ 137.4 and closed at 150. I had initially wantd to close at 148, but I cancelled that order seeing that pullback was again failing. But I was afraid so I soon closed the call at 150. The day high for the call was around 155 I think.
So thats the commentary for the trades.
I've attached both the chart and the trade sheet. Please bear with me that I've again attached and given links. I'm sorry if this is inconvenient. I promise that later times I will use tools that are more easy for you.
day ended with some 60 points gains.
MY SYSTEM IS NOT PROVEN
IN the end I want to say that - This is a UNTESTED SYSTEM - just 1 month of dry runs and 3 days of real-time tests does not make a system. I think I have been very very lucky for these 3 days. Please do not take this as any proof of success. I am just telling you how I think since you guys asked me.
There are more senior guys on the forum who have been doing this for years (Ghosh Sir and Dan are the guys you should go to for your help and advice). I am learning and using their advice to build my system. I promise you to share my failures as and when they come, because they are inevitable.
Sorry for such a long post
.The chart here (there is a typo in the chart - calls are 5800 PE, not 5600 PE)
http://img155.imageshack.us/i/realtimetest19thjanopti.jpg/
