100% profit in 6 months...!

[linkon7]

scrip		 cost	 	 present 	 diff 	 	profit/loss 
4900 CE  (Feb)	 156.00 	 118.00 	 38.00 		 3,800.00 
4900 PE  (Feb)	 146.00 	 190.00 	 (44.00)	 (4,400.00)
Nifty Futures	 4,899.00 	 4,835.00 	 64.00 		 6,400.00 
4800 call (jan)	 51.00 		 50.00 	 	(1.00)		 (100.00)
 as hedge				
			  			Total = 	 5,700.00

The position of the nifty straddle as of end of 27th Jan 2010

Script
4900 CE (Feb) shorted at 156 has a current price of Rs. 118 is at a profit of Rs.3800
4900 PE (Feb) shorted at 146 has a current price of Rs. 190 is at a loss of Rs.-4400
Nifty Futures short Initiated at the averaged price of 4899 has a current price of Rs. 4835 is at a loss of Rs.6400

Total = profit of Rs. 5700

Statistics

Cost of the straddle = 302.00
present price of the straddle = 308.00
Actual value of the straddle = (435.00)
profit on straddle = (6.00)
Profit on nifty = 64.00
loss on Hedge = (1.00)

total profit = 57.00

 

[linkon7]

nifty calculation
bought at 4918, covered at 4920, points gained 2, -2 as brokerage, net gain of 0 points
sold at 4898, covered at 4902, points gained -4, -2 as brokerage, net gain of -6 points
bought at 4902, covered at 4905, points gained 3, -2 as brokerage, net gain of 1 points
sold at 4898, covered at 4902, points gained -4, -2 as brokerage, net gain of -6 points
bought at 4903, covered at 4896, points gained -7, -2 as brokerage, net gain of -9 points
sold at 4896, covered at 4903, points gained -7, -2 as brokerage, net gain of -9 points
bought at 4903, covered at 4898, points gained -5, -2 as brokerage, net gain of -7 points
sold at 4898, covered at 4876, points gained 22, -2 as brokerage, net gain of 20 points
sold at 4888, covered at 4868, points gained 20, -2 as brokerage, net gain of 18 points
sold at 4868, covered at 4867, points gained 1, -2 as brokerage, net gain of -1 points
sold at 4867, covered at 4861, points gained 6, -2 as brokerage, net gain of 4 points
bought at 4883, covered at 4878, points gained -5, -2 as brokerage, net gain of -7 points
sold at 4878, covered at 4882, points gained -4, -2 as brokerage, net gain of -6 points
bought at 4882, covered at 4896, points gained 14, -2 as brokerage, net gain of 12 points
sold at 4895, covered at 4876, points gained 19, -2 as brokerage, net gain of 17 points
sold at 4878, covered at , points gained 4878, -2 as brokerage, net gain of 0 points

effective cost of nifty short = last place shorted, 4878 plus 21
4899

 

[sumosanammain]

fnbsftgjmtykdyuklydfil

 

[linkon7]

Its been a long time since i played this strategy..and i am rusty. Had plenty of bad decisions and lost big on the fall. NF fell 170 points and i didn't capitilise even 50%.

Ended up having 15 trades on the nifty and all because i couldnt define my Sl properly. I waited for 4900 to hit before i initiated trade on NF. I could have easily shorted at 4925 and rode it down. Another major mistake was the assumption that 4912-18 would be the bottom. mother of all screw ups, sure screwed me today.

Its not the profit i carry home, but the way i played. Need to redefine the rules of entry / exit again. Process of unlearning is tough and am very disappointed at myself...

 

[linkon7]

16 trades, 32 legs to them..................

Think again

Is it worth it?

Is it?

?

its worth it...! learning something has a price. mental and monetary. Paid both today. If i followed my normal setup, i would be 150+ today. But I had to adapt to a new frame of mind. The money part doesnt matter much, but being clueless during market hours, is a crime. And i am guilty of that today....!

 

[trader.trends]

Nifty Futures short Initiated at the averaged price of 4899 has a current price of Rs. 4835 is at a loss of Rs.6400

Should that read profit of 6400??

 

[linkon7]

This method requires me to hold on to a position. Which i am clearly not good at. I was using a setup... meant for scalping 15-20 points. Even if price ran away, it didnt matter. But now, things are different. Anyway no major damage done. Lost at least 50-70 points in un-necessary trades. Still end of day, things are under control.

Nice part is, as long as NF doesnt trade near the strike price, not much action is required. So i can concentrate on my own account...

 

[linkon7]

Should that read profit of 6400??

yes...profit of 6400, offset by the rise in straddle price...
not really good at excel concatenate function...but it solves a purpose...

 

[AW10]

Totally agree with you...
This system needs me to be on the short side below 4900 and long side above 4900...

And the whipsaw around this level is just part of the game...

Will have to recover these slippage later...

Linkon, food for thought.
Does it make sense to use a filter of 20 points around 4900 to go long/short ?
You have been shifting positions long/short around such a big round number xx00.
Generally mkts are choppy around such round number but your option strikes will always be such a round number.

Maybe, if u use, 20 points filter on either side of 4900, probably, u would have avoided the choppy trades, and got into clear directional trades. My observation is 20 points range around xx00 numbers are the action packed range where bull/bear fight to show their strength (haven't got statistics for this hence it is gut feel at this stage).

Another psychological observations - how do u treat market's money ? Is the colore of this money different from your original capital ? Why do we feel market's money given to us is for enjoyment and carries less value then our own personal initial capital ?
These are more fundamental issues and there is no single answer. You got to answer this yourself. IMO, if you treat them differently, then u are always carrying the risk of giving back the accumulated profit. You will make profits, but will find it hard to keep it in your account.. Personally, I had to struggle to sort out this challange and now for me, both money is same. If mkt has given me some money, then it is same as my initial capital and I treat both money as same. It has helped me in limiting the amount that mkt can take back from me, after it has given it to me.

In this short straddle, fine, mkt gave to 300 rs. for next 25 trading days i.e. u have 12 rs of free timedecay (or pocket money) with you every day. So if u have 3 scalping trades loosing more then 12 points including brokerage, then you have finished today's pocket money. IMO, ur real P&L is in negative. Lets not forget, straddles never give u max profit of 300 points. With your prev experience u would know how much mkt deviates from Straddle strike price, so u shd discount that average deviation from you 300 rs of collected premium, cause u will have give that back to market at some time in future.

Hope you are getting my points here. Sharing these observations to give u different insight into your strategies and challange your beliefs.

All the best and Happy Trading

 

[linkon7]

Review :

i was trying to follow the swing of the last 2 bars. with confirmation from CCI and it was tossing me like a salad today.

Following guppy MMA would eliminate all these. Simple trendline break would also be enough to keep me on the right side of the trend...