Augubhai's notes - Smarts, Guts and Luck
- Thread starter augubhai
- Start date
Not much updates from my side. been busy and so trading slower.
was trading ORB with options the last few days.
what i did was -
1. place buy stops for both March Call and Put. position size decided based on option delta.
2. no SL orders, since the buy stop for Put would act as the limit loss in Call, and vice versa.
3. if both orders executed, then square-off positions EOD.
4. if only one side executed, once in a while check whether the other order is still open, and not cancelled by broker due to "system problems". square=off position EOD
hope is to get a day where only 1 side is executed. this is where the money comes in - if price continues to move in the same direction, and does not reverse much. I did not trail SL to lock in profit. Was lucky to get one such profitable day.
on the other days, when both sides are executed, aim is to get profit when NF closes away from open, and the days candle has a large body.
on most days, i lost, but I lost negligibly compared to the potential profits. on a couple of days, i got profit even though the price did not move much - due to change in premium (puts underpriced in the morning, but overpriced by EOD, etc), and to some extent volatility (vega).
but yesterday, i learnt my lesson - that theta is an enemy. both the orders executed and the price swung both sides, but my mtm was positive only at the extremes, and EOD I squared-off at a loss
Moral of the story: Best not to trade both side style as expiry gets nearer. or trade far month...
was trading ORB with options the last few days.
what i did was -
1. place buy stops for both March Call and Put. position size decided based on option delta.
2. no SL orders, since the buy stop for Put would act as the limit loss in Call, and vice versa.
3. if both orders executed, then square-off positions EOD.
4. if only one side executed, once in a while check whether the other order is still open, and not cancelled by broker due to "system problems". square=off position EOD
hope is to get a day where only 1 side is executed. this is where the money comes in - if price continues to move in the same direction, and does not reverse much. I did not trail SL to lock in profit. Was lucky to get one such profitable day.
on the other days, when both sides are executed, aim is to get profit when NF closes away from open, and the days candle has a large body.
on most days, i lost, but I lost negligibly compared to the potential profits. on a couple of days, i got profit even though the price did not move much - due to change in premium (puts underpriced in the morning, but overpriced by EOD, etc), and to some extent volatility (vega).
but yesterday, i learnt my lesson - that theta is an enemy. both the orders executed and the price swung both sides, but my mtm was positive only at the extremes, and EOD I squared-off at a loss
Moral of the story: Best not to trade both side style as expiry gets nearer. or trade far month...
Today, i am not trading ORB, but trading gut feel as usual. Done about 10 trades - most breakeven, but 3 losses. One Put trade in the morning was good, so i am still green...
Am thinking of posting charts EOD, but it may not serve any purpose unless i have a consistent or defined trading method. The posts in my diary stopped making sense to me sometime back, bcos when I read through it, i have no clue why I took or exited a trade...
Am thinking of posting charts EOD, but it may not serve any purpose unless i have a consistent or defined trading method. The posts in my diary stopped making sense to me sometime back, bcos when I read through it, i have no clue why I took or exited a trade...
Planning to go back to the future today. Tried a new strategy yesterday, but did not work so well with the near month options. Should not be blaming options - yesterday was a bad day to try anything new.
Trying Futures today to simplify life a bit - not need to watch mutiple options and deltas and typos...
Trying Futures today to simplify life a bit - not need to watch mutiple options and deltas and typos...
So here is the plan...
I want to find the day's trend early and stay in it for long. How? The plan is to draw a line from day high to day low, and bet on the direction. That's all.
Also, going to try partial profit booking, because many times I give up good profits.
Initial Risk: 0.5% of capital
Initial SL: About 0.1% from entry, below any 1 min bar
Trailing SL: None
Partial Profit Taking: 50% to be booked at the higher of 4.236 times initial risk, or 1.618 times distance between entry and swing pivot. 4.236 = 2.618*1.618. I am not a fan of fibonacci, but need to define a multiple at which to book profit. and these look good enough.
Adds: at pullbacks.
SAR: Entry in opposite direction.
I want to find the day's trend early and stay in it for long. How? The plan is to draw a line from day high to day low, and bet on the direction. That's all.
Also, going to try partial profit booking, because many times I give up good profits.
Initial Risk: 0.5% of capital
Initial SL: About 0.1% from entry, below any 1 min bar
Trailing SL: None
Partial Profit Taking: 50% to be booked at the higher of 4.236 times initial risk, or 1.618 times distance between entry and swing pivot. 4.236 = 2.618*1.618. I am not a fan of fibonacci, but need to define a multiple at which to book profit. and these look good enough.
Adds: at pullbacks.
SAR: Entry in opposite direction.
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