Day Trading Stocks & Futures

[Novice30]

re: Day trading Nifty & Banknifty Futures

Buy on rumour and Sell on news.
Before Election results - The markets heavily priced the options then and vix was high.
Immediately when the news out VIX fell so sharply that the premium of the call options decreased so drastically that most of the speculators where caught.

But this time it is a different story.
The RBI/FED news was out.Market reacted for both.
Once RBI news was out - surprising the markets the markets went up.
Again with FED news came down.
But the rally on Friday has nothing to do with any news.
The VIX is already down.

It could be a start of fresh Rally - Christmas .
Trend is up.
Just 3 more days for expiry.

Be careful.

Thanks JK!

Actually I forgot to add, I have sold January calls, so I feel markets will definitely come down before Jan expiry.

I am pretty new to Options, I started in October and suffered a loss of 3K. I learnt from my mistakes and made 8K profit in November. I hope to learn from all of you guys in this forum.

Actually, I was thinking whether the 2 big event s are actually over, bcoz they can come back next month. RBI can hike rates in Jan and secondly the actual tapering will begin in January and then we will know how much less FII inflows India gets. I think January series will be under pressure.

 

[AFORASTRO]

re: Day trading Nifty & Banknifty Futures

Thanks JK!

Actually I forgot to add, I have sold January calls, so I feel markets will definitely come down before Jan expiry.

I am pretty new to Options, I started in October and suffered a loss of 3K. I learnt from my mistakes and made 8K profit in November. I hope to learn from all of you guys in this forum.

Actually, I was thinking whether the 2 big event s are actually over, bcoz they can come back next month. RBI can hike rates in Jan and secondly the actual tapering will begin in January and then we will know how much less FII inflows India gets. I think January series will be under pressure.

i think you were already in profit when the call went to 89.7

 

[Novice30]

re: Day trading Nifty & Banknifty Futures

i think you were already in profit when the call went to 89.7

I sold @ 105, currently at a loss of 4500.

But no probs, Jan expiry is far far away. :clap:

 

[arcus]

re: Day trading Nifty & Banknifty Futures

One can push large volumes in Index Futures without affecting the price too much.It has excellent liquidity and depth. Stocks can be manupulated over a short period of time but Index Futures it is difficult to manupulate.

We trade stocks futures too like RIL,SBI,ICICI bank,TCS etc..but strictly stick to large cap nifty stocks. They have less erratic moves than their midcap brothers.

Smart_trade

Paul Tudor Jones in the book Market Wizards says when asked the question

Question - What is the most prominent fallacy in the public's perception about markets?

Answer - That markets can be manipulated. That there is some group on Wall Street that controls price action in the markets. I can go into any market and create a stir for a day or two, maybe even a week. If I go into a market at just the right moment, by giving it a little gas on the upside, I can create the illusion of a bull market. But, unless the market is really sound, the second I stop buying, the price is going to come right down. You can open the most beautiful Saks Fifth Avenue in Anchorage, Alaska, with a wonderful summer menswear department, but unless somebody wants to buy the clothes, you will go broke.

 

[jagankris]

re: Day trading Nifty & Banknifty Futures

I sold @ 105, currently at a loss of 4500.

But no probs, Jan expiry is far far away. :clap:

Dear Novice,

Yes I too have the same feeling.

But Pls dont hope or feel january series may be under pressure.
Long expiry.

I wouldn't write calls and hold on to losses at this point of time.
May be I will wait till first week of january.


Can you pls check the chart of the december month for the past 5 years
I dont have data before that.


Inspite of long expiry IV's are already less and likely to fall more during the week.

Just for the sake of argument what if the market makes new high - say 6500 - 6600 - 6700 or doesn't reverse at all till the 3rd quarter results - Infy results are declared.(May be 2nd week of Jan).

But what is your stop loss ?

Best of luck.

 

[Novice30]

re: Day trading Nifty & Banknifty Futures

Dear Novice,

Yes I too have the same feeling.

But Pls dont hope or feel january series may be under pressure.
Long expiry.

I wouldn't write calls and hold on to losses at this point of time.
May be I will wait till first week of january.


Can you pls check the chart of the december month for the past 5 years
I dont have data before that.


Inspite of long expiry IV's are already less and likely to fall more during the week.

Just for the sake of argument what if the market makes new high - say 6500 - 6600 - 6700 or doesn't reverse at all till the 3rd quarter results - Infy results are declared.(May be 2nd week of Jan).

But what is your stop loss ?

Best of luck.

Hi JK,

Yup, I know that December month is good for stock markets and gives good returns but then there was no tapering in those Decembers unlike this December.

I have no stop loss at this point. I will hold on to my calls. If trend becomes completely bull, I will put more money into my account and buy some calls to reduce my losses. I will also count on time decay to reduce my losses for my existing calls.

But to be honest, I dont see any big trigger that can turn markets into full fledged BULL. Every 2/3 weeks, a meaningful correction is likely.

 

[AFORASTRO]

re: Day trading Nifty & Banknifty Futures

dec 2012

dec 2011

 

[jagankris]

re: Day trading Nifty & Banknifty Futures

Dec 2012

Dec 2011

 

[AFORASTRO]

re: Day trading Nifty & Banknifty Futures

Hi JK,

Yup, I know that December month is good for stock markets and gives good returns but then there was no tapering in those Decembers unlike this December.

I have no stop loss at this point. I will hold on to my calls. If trend becomes completely bull, I will put more money into my account and buy some calls to reduce my losses. I will also count on time decay to reduce my losses for my existing calls.

But to be honest, I dont see any big trigger that can turn markets into full fledged BULL. Every 2/3 weeks, a meaningful correction is likely.

your loss doesn't have limits but gain do have........what if nifty went to 10000(if lalu prasad is declared as prime minister candidate) or 4000(if mulayam singh is chosen for prime minister nomination or what ever it is) as depicted by Elliot broking house :rofl:........

 

[Smart_trade]

re: Day trading Nifty & Banknifty Futures

Great point ST da. Thanks you ! But could you please share how to trade/avoid this. Example : Let's say I'm long and price starts to decline, is it wise to wait for >30 points of drawdown to see if trend has changed. We would be losing our profit in that. Another scenario : Let's say I entered short after a long trend reversal (after pin bar on HOD etc), how to know if the price is going to go below 30 points or not ? I mean should we wait for 30 points of dip to enter short ? That would be like losing most of the profits.

You got me wrong. If we are long , we go on booking profits at important resistance points. And on dips we enter long again. We dont wait for market to drop 30 points.....30 points is too much to risk. But on trend days ( let us take uptrend example) most of the dips will be shallow or small sideways action.

Another point to note is when we book profits and the market does not give us an opportunity to enter again at lower levels but we have to enter at higher levels than the level where we booked profits means that the market in in strong uptrend mode....so dont expect deep corrections.

There is one exception to the above. We can observe this on most strong days and is one of my favourite plays. Just before last 1 hour that means just before 2:30 there will be a deep correction which most bulls will be stopped out.(Many traders are aware of this phenomenon and these traders call it 2:30 factor) It is for shaking the weak bulls and throwing them out before the end play starts. Here bulls loose their long positions. This is where I use my 30 points thumb rule.I will not hold my long positions in that 30 points dip....I will probably book profits much earlier. But when the 2 O'clock correction goes to 15-20 points, what I do is I buy from 15 points from the top till 20 points from the top...and keep my stoploss at 30 points from the top ( can use some nearby pivots also ). So on my first buy I risk 15 points and on next lots 10 points..if the stops are hit, I will loose that. But if the uptrend continues after shaking out the bulls, then the last 1 hour the market accelerates. This is what happened on Friday.When the market takes out the high after this deep correction, it is almost certain that it will trend up till the end so buy every dip now, but now market wont give many chances as it has to do all the move in last 1 hour. This play gives almost 4:1 Reward to risk ratio and is one of my favourite trades.

I have just poured my thoughts above...not sure whether it explains the process clearly.

Smart_trade