Option Trade Diary from 26th April 2021

[ujjwalsaha]

Today Lost Rs. 2250
My stop loss got triggered.
Last two days, I were trying to get the downside but I am getting trapped.
No Issue, I will continue to do so as I believe after small small loss, the reward will be big as there may be huge downside

 

[optionwriter]

My previous mistakes were
1. Not following exit rules strictly hoping that loss may turn into profit
2. Not following per trade maximum capital allocation

This time (today) you are doing new mistake instead of old..
your heart reading Market but market don't care anyone..
if you do chart based then follow the chart ,
now a days market having high volatile...intraday margin reduced, Future margin increased if not hedging, so exchange and FIIS/DIIS are forcing retail inverters to "option market " to trap for their money..

happy trading.

 

[ujjwalsaha]

This time (today) you are doing new mistake instead of old..
your heart reading Market but market don't care anyone..
if you do chart based then follow the chart ,
now a days market having high volatile...intraday margin reduced, Future margin increased if not hedging, so exchange and FIIS/DIIS are forcing retail inverters to "option market " to trap for their money..

happy trading.

aahhh.....you are absolutely right...I will follow your advice.. I will be heartless in following the chart...
I also wish you all the best...May you be successful...

What I have found out that for Intraday strict SL based trading system, option selling or futures will be more profitable ( if you keep the same Risk per trade). Futures seems to be best for intraday in terms of profit opportunity. but with strict SL as sometimes within 1-2 minutes, huge movements. Overall Risk-Reward is tilted towards the futures as you can take more advantages of volatility or small movements.

But for swing trading spanning several days, buying Options is less riskier as you can not manage next day gap openings ( for swing trading the risk per trade is easier to control in case of option buying as you can fix it before entering into the trade). But you can not control overnight risk by future or option selling. If you follow strict per trade maximum allocation, I think it will be easier not to blow the trading account by option buying strategies. Risk-Reward is more tilted towards the option buying with peace of mind and sound sleep in night.

Hence, I will use Option buying for swing trading
For Intraday trend following Strict SL trading system, I will use Futures. I think it will be suitable for me.
This is my new understanding.
I need to add Rs 35,000 to my account making it to 1.2 Lacs. as in MIS (intraday) Mode, the margin for 1 Lot of nifty future seems to be around Rs 90,000

 

[ujjwalsaha]

I am carrying 14800 PE @61 for tomorrow expiry
Maximum Risk: 61x 75 = Rs. 4575
Currently @50

 

[badarivt]

For people with small capital, getting the direction of the market right is the only way to gain money (even with options trading). If you do not have a 'system' for market direction, forget your capital. Before ZD started discount brokerage, all that a trader had was costly brokerage fees and not even charts. Today everyone has access to multitude of technical indicators. Advise you to get hold of a profitable indicator first before venturing into trading. Best wishes. Generally, the day's first candle high and low are important for day trading. Better to take longs above the high and shorts below the low and avoid counter-direction bets.

 

[ujjwalsaha]

For people with small capital, getting the direction of the market right is the only way to gain money (even with options trading)

This is so true.
I think I have got a reasonable indicator but the problem is I am not following it...From Friday onwards I will strictly follow my system not my gut feeling and own judgement.

 

[optionwriter]

For people with small capital, getting the direction of the market right is the only way to gain money (even with options trading)

This is so true.
I think I have got a reasonable indicator but the problem is I am not following it...From Friday onwards I will strictly follow my system not my gut feeling and own judgement.

" to follow indicator " : my suggestion is no more complicated / more than 2 indi no need, just follow without fail what it says ..
no argument with indicator or don't try to opposite by your heart feelings..
once take the entry fix the stop loss as per your chart..good realtime feed is enough in beginning ,use josh rtd

Happy Trading...

 

[ujjwalsaha]

no argument with indicator or don't try to opposite by your heart feelings.. just follow without fail what it says ..

 

[ujjwalsaha]

I will not trade for few days.
In the morning I sold my Put and after that market fall started and I become perplexed and then felt bad.
I think I can do it but require some emotional conditioning.

 

[timepass]

I will not trade for few days.
In the morning I sold my Put and after that market fall started and I become perplexed and then felt bad.
I think I can do it but require some emotional conditioning.

Maybe you can paper trade and post your trading logic here. The comments from the members should be helpful.

Member @Raj232 had posted an option strategy somewhere where he takes an option trade when the option closes above 20sma on BB. He had included an envelope of +/- 2% or something like that. He used it to buy the options on closing above 20sma, you can use it for selling when closes fully below 20sma, with some kind of filter.

Another way would be to look for 5/21ema crossover on a small timeframe, like 3/5 minutes.