A plunge in Indian Stock market

[Sunnyraj]

When you trade in futures and options and have an over night position there's always a risk of GAPS. If its in your direction of trade then Ok, but if it gaps in opposite direction, it can hurt you badly.

So as pointed out by seniors, you should focus on cash segment. Even I want to trade futures, but only after i get comfortable with cash segment.

We both are in the same boat i can say

 

[Riskyman]

Surely , i want to get comfortable with Cash segment first.
Also i see that only advantage in trading in futures is on the SHORT side..so if the market is down run..Futures may help you captures many Gap downs which Cash segment player can hardly get..

Apart from it , i guess i can increase my Size in Cash too to make it look equivalent to Futures...Not sure if there are any Brokerage allowances on Futures though...

Trading in cash only steals you opportunities and costs you time. Time is money. If the markets begin a downtrend then you have to wait for the downtrend to be over to enter long only positions. If markets trend down for a week then you are doing nothing but sitting around. You are actually loosing time value of money by not employing it. The faster you 'figure' out trading futures, the better. Most will probably disagree with my views and ask you to take baby steps. But ask yourself if you started making money in cash from day one??? You probably lost some money before you figured out how to manage your trades better. The same will happen when you do futures no matter how much experience you have trading cash. I consider margin trading on intraday basis far more dangerous than futures trading. Also, being consistently profitable in cash doesn't mean that you can be consistently profitable while trading derivatives. Why? Because in cash (non-margin ) if a trade goes against you, you can end up holding it for a few days/weeks till you breakeven or make profits. May not be so in derivatives.

The beauty of trading in futures is that it allows you to hedge. Your ability to do the same in cash in very limited which is exactly why you have F&O. Futures and options by design are not meant for speculation but as a hedging mechanism. Of course, trading options without knowing anything about them can lead to a disaster. There are risks associated with all forms of speculation, be it cash or derivatives. So long as you know what you are willing to risk, you will do fine. Although, I personally dont believe in paper trading, but you could start on paper and try to figure out how your trades in futures go.

Lastly, I hope you will appreciate that Im only trying to point a few pros & cons of derivative trading and not suggesting that one "should" trade in F&O. The risk is yours so please study everything very carefully.

 

[amitrandive]

I just wanted to share a peculiar thing which i have noticed on ZEEL today..

Its really awkward how a few thousands shares at open can set the tone for the day...

The stock was made to gap down on few thousands shares and then it traded in that range for whole day...does not it look like some big player is trying to design the map for the stock...or trying to flush out buyers and making stock look like weak??

Or is it really getting weak? That time will tell in a day or 2.

But any takes on Gap Down / Gap Up from Seniors?

Why try and predict gap up or gap down???
Just follow the trend and price action.
Check out daily chart of ZEEL , now my question is why do you want to take delivery in ZEEL ?

http://www.traderji.com/technical-a...igh-probability-breakouts-11.html#post1047167

 

[Riskyman]

Even I want to trade futures, but only after i get comfortable with cash segment.

Success in cash segment does not ensure success in futures trading.

 

[amitrandive]

I am having bad bad days with delivery stocks...

Yesterday i had taken delivery of ZEEL 300 shares at around 352..and it closed at 353 and was showing a open profit of 350+...

Today Market opened in lush green..and nearly all stocks opened gap up in green..except a few...and one among them was ZEEL..

it opened gap down in red...i was comfortable there..as i already knew it would go down to its support area of 348...So i didn't panicked..it went to 348 and played there and then tried to go up..

It ranged in between 348 and 350 for nearly whole day and tried to go up..but couldnot..

Peculiarly there was good buying happening at 348 level...i could see that in order flow..

I let it ride for tomorrow too...today it was showing an Open Loss of Rs 1200..

Reason for taking it forward is because of it seems consolidating in that range so i need to exit once it moves away from that range..


I had selected a few other stocks to play today , and all of them gave good moves...e.g. Reliance , TATA Motors , Yes Bank , TATA Steel , TVS Motors
But i was struck with ZEEL so didnot traded others today...

Stocks Traded: None

@Amit/Seniors: any takes on TVS Motors , Yes bank?

 

[amitrandive]

Success in cash segment does not ensure success in futures trading.

Riskyman

Totally agree with you on this !!!
:clapping:

 

[sspms2002]

HI Amit..

The reason for taking delivery of ZEEL was that its kind of formed a double bottom at 340 level..and had a renewed upside pressure...
I today also feel that it should go up...as it just consolidated in a range and may break out up...Also the volume was low today...

Also i saw recommendations on it from so called Experts on news..But as it always happens that stock go down after their recommendations for a few days before going up.. (I just wanted to cite that though now a days i don't pay heed to it)


On the other hand for TVS Motors i feel that on an UP day it was not able to recover its yesterday's loss and it should follow down in next few trading sessions..

 

[Riskyman]

I today also feel that it should go up...

Im sorry but I have to say the markets dont care a damn about what we "feel". It will do its own thing. One of the most important things I learnt was never to trade with a bias. When you have a bias, you see only what you want to see and find all reasons not to look at what the markets are saying. Keep an open mind and trade only on merit.

With respect to ZEEL you may have been justified in thinking that its hitting a double bottom and may repeat may take support. What should have considered is that we are going to be in choppy terrain for the next few days and that support at 340 can easily be breached triggering your SL.

 

[kiran_thiru]

@SSPMS2002

my words about equity.................

i am trading in equities but intraday only. i am trading both long & short. i don't want to take delivery. because of sleepless nights.

most of times SSPMS2002 trades in intraday only. when the stock was in loss, then he took that for delivery. this is wrong decision. holding falling knife will cut our hands. if you has a loss trade, then square off it immediately at any cost. being prepare for closing loss trade as little as much.

with full cash (no leverage), and for intraday, why don't you took short trades? if you trade only in long, most of time you miss chances in short trading. because market gives both chances for long & shorts.

only in f&o, we can go for both short & long was false statement. we can take in equity too.

the main advantage in equity is we can part quantity, and can square off different rates. if we took a lot about 250 shares in f&o, we can take in equity too, but exit in parts where we comfortable.

trading is not as only buy & sell. but it is to control our mind in buy & sell gives profits.

 

[kiran_thiru]

@SSPMS2002

my words about equity.................

i am trading in equities but intraday only. i am trading both long & short. i don't want to take delivery. because of sleepless nights.

most of times SSPMS2002 trades in intraday only. when the stock was in loss, then he took that for delivery. this is wrong decision. holding falling knife will cut our hands. if you has a loss trade, then square off it immediately at any cost. being prepare for closing loss trade as little as much.

with full cash (no leverage), and for intraday, why don't you took short trades? if you trade only in long, most of time you miss chances in short trading. because market gives both chances for long & shorts.

only in f&o, we can go for both short & long was false statement. we can take in equity too.

the main advantage in equity is we can part quantity, and can square off different rates. if we took a lot about 250 shares in f&o, we can take in equity too, but exit in parts where we comfortable.

trading is not as only buy & sell. but it is to control our mind in buy & sell gives profits.