Escape's Options Trading Diary - Phase 2

[escape]

Bought Nifty 12SEP2012 CE 5500 @ 210.00 and Exit @ 217, profit of 7.00 points, less brokerages

 

[escape]

Bought Nifty 12SEP2012 CE 5500 @ 216.00 and Exit @ 219, profit of 3.00 points, less brokerages

 

[escape]

Bought Nifty 12SEP2012 CE 5500 @ 224.00 and Exit @ 216, loss of 8.00 points, less brokerages

 

[manojborle]

Escape can you explain how you took these trades, I used sh315 and bought 5600 ce @ 96 and exited @ 136.
Then GFZ technique, bought 5700 put @ 50 and exited @ 56

 

[escape]

Escape can you explain how you took these trades, I used sh315 and bought 5600 ce @ 96 and exited @ 136.
Then GFZ technique, bought 5700 put @ 50 and exited @ 56

Manojborle, there were lots of trades, most of them are either on last swing support price or little higher than last swing price.

You really did well in your trade, hope some day I will have such trades.

 

[manojborle]

Manojborle, there were lots of trades, most of them are either on last swing support price or little higher than last swing price.

You really did well in your trade, hope some day I will have such trades.

Actually my concern was I saw you bought 5500 CE @ 194 but you did not hold on to it.
When market was so strong I think there was no need to check any indicators but only watch price action and on seeing weakness exit.
I did the same on 5 min chart the candle which made a new high was followed by almost same big Red candle where I exited the Call and bought Put again on seeing strength I exited the Put.

 

[escape]

Actually my concern was I saw you bought 5500 CE @ 194 but you did not hold on to it.
When market was so strong I think there was no need to check any indicators but only watch price action and on seeing weakness exit.
I did the same on 5 min chart the candle which made a new high was followed by almost same big Red candle where I exited the Call and bought Put again on seeing strength I exited the Put.

Manojborle, on 2 min chart, it was showing Low-High, Low-Low (exactly Drop-Base-Drop sequence). Reason to buy at 193 was being seem as good support level, but was not sure if it will break Drop-Base-Drop sequence, so kept SL very close and got exited early, just before next big candle.

What are time frames you normally prefer for options trading, how do you decide about SL, I see your exit was pretty close, although it went little higher than 136?

I normally watch 2 min chart.

 

[manojborle]

Manojborle, on 2 min chart, it was showing Low-High, Low-Low (exactly Drop-Base-Drop sequence). Reason to buy at 193 was being seem as good support level, but was not sure if it will break Drop-Base-Drop sequence, so kept SL very close and got exited early, just before next big candle.

What are time frames you normally prefer for options trading, how do you decide about SL, I see your exit was pretty close, although it went little higher than 136?

I normally watch 2 min chart.

I prefer 5 min chart.
I am trading in mostly 1000 qty in 1 trade, so for this trade I started exiting from 115, then @116, then @ 132 and remaining @ 136.
I am not using stoploss as I don't know how to place it tfor option trade.
Actually initially I bought 5600 call in small quantity @ 84 and exited @ 88, then bought @ 88 and exited @ 96 and then I increased the quantity and bought @ 96.
In between on seeing weakness I bought 5800 put @ 142 in small quantity as it was against general trend, when nf was @ 5664 and on 5 min chart 5669 was resistance and 5646 was support.
So instead of using option stoploss, I use nf levels for my exit.
As nf went above 5669, I exited 5800 put @ 136 with a small loss and after 10 minutes on confirmation of price taking support near 5669, I bought 5600 call in large qty (which is 1000) and exited as I told you above.

I am attaching 5 min chart to show the levels, Please have a look

 

[escape]

Thank you Manojborle, in above chart, at support level 5688, I bought CE 5500 @ 193.00 (near 1:15pm), and exited exactly on Doji @ 197 (near 1:21pm). But later on it got support and went up (I missed that moved). Anyway I secured 4 points profit there.

 

[escape]

Here is log as of last session.

Log:
NIFTY 27Sep12 CE 5500.00 (B)1400 @ 197.58 (S)1400 @ 201.52 (P/L) +5516.00
NIFTY 27Sep12 PE 5800.00 (B) 300 @ 141.37 (S) 300 @ 132.00 (P/L) -2811.00

Result:
After deducting all charges: Rs +2,119.27

Capital Status for the current month:
Exact Initial Capital: Rs. 45,000/-
Current Ledger balance Rs. 43505.79 (-1494.21)

Learning/Remark:
I really need to work on Reward/Risk ratio. My normal risk is 10 points below, but for reward, I keep trailing upside and yesterday at few instances, it was too close.

Possibly I'm thinking of reducing initial SL to 5 points or may be to keep it 3 ATR below.