Escape's Trading Diary - Options

[escape]

I'm using RKSV for NFO and Zerodha for currency options (and sharekhan's TT for charting

Thank you timepass, I'm going for RKSV for NFO.

:thanx:

 

[escape]

If you are trading less than 5 lots of currencies, then Zerodha will be costlier.
I am trading currency in RKG. Per lot 0.99/- (99 Paise) only. :clap:

In currency Fut, break-even comes at just 3 pips in RKG.

Thank you soft_trader for information. I have decided to go for RKSV for NFO. They have Freedom plan and I hope to trade more than 3 lots/trade per day and secondly they have office in Mumbai.

:thanx:

 

[escape]

Log:
Yesterday all my entries were wrong. Not even a single entry reached break-even point.

NIFTY OPT 30AUG 12 CE @ 5300 (B)200 @119.60 (S)200 @114.28 -1064.00
NIFTY OPT 30AUG 12 PE @ 5500 (B)100 @125.73 (S)100 @123.85 -188.00


Result:
After deducting all charges: Rs -1345.80

Capital Status:
Exact Initial Capital: Rs. 15746
Current Ledger balance Rs. 11598 (-4148)

Learning:
Made certain changes in my strategies, will do less trade, but only ones where factors of failure are less. Let's see.

 

[DanPickUp]

Dear Escape

I think you do a very good thread here as it makes clear to others and to you, how difficult it is to trade naked directional options purely on TA. In the long run, not many make profit with it, even most will lose there capital to do so.

I went through your first post of this thread where you explained, that you not will hedge either using any option strategy. I mean: What you do now is throwing a coin in the air and you have a 50 / 50% situation. That is the nice thing in trading. There is no other business in the world where we can have such a high change to make money by knowing nothing or just little about a subject.

Even than: Where could be your advantage to win the game in the long run? As you do it with the 50 / 50% change, you would have made the biggest profit by putting all the money you had in to the first trade and you would have doubled your money. That was your biggest chance and that is gone. Now you are on a road by losing little peaces all the way down and if not some thing special happens or you double your risk, you are catche'd in a whole. So you have to improve your odds.

But how can you improve your odds? Here you have to find an answer. and it is surely not an indicator which is going to do it.

Good trading

DanPickUp

 

[escape]

Bought NIFTY 30Aug2012 PE 5500 @ 101.45, EXIT at 107.75

Profit of 6.3 points less brokerages.

 

[augubhai]

Bought NIFTY 30Aug2012 PE 5500 @ 101.45, EXIT at 107.75

Profit of 6.3 points less brokerages.

That was quick :clap:

 

[escape]

Dear Escape

I think you do a very good thread here as it makes clear to others and to you, how difficult it is to trade naked directional options purely on TA. In the long run, not many make profit with it, even most will lose there capital to do so.

I went through your first post of this thread where you explained, that you not will hedge either using any option strategy. I mean: What you do now is throwing a coin in the air and you have a 50 / 50% situation. That is the nice thing in trading. There is no other business in the world where we can have such a high change to make money by knowing nothing or just little about a subject.

Even than: Where could be your advantage to win the game in the long run? As you do it with the 50 / 50% change, you would have made the biggest profit by putting all the money you had in to the first trade and you would have doubled your money. That was your biggest chance and that is gone. Now you are on a road by losing little peaces all the way down and if not some thing special happens or you double your risk, you are catche'd in a whole. So you have to improve your odds.

But how can you improve your odds? Here you have to find an answer. and it is surely not an indicator which is going to do it.

Good trading

DanPickUp

Dear Dan,

Thank you for your post and showing insight.
Everyone needs to go through experience and learn lessons (bad or good). Even I'm on that same path, kept some budget for this exercise and as given in my first post, this is to learn tactic, and survive as long possible on this limited budget.

My current goal with this amount and exercise is not to get easy profits, but see and feel difficulties of options trading (the one with high risk and high reward). If I would have got easy profit in earlier stage, I may not have learnt disciplines (like putting Stop Losses, manage risk, money management).

Since day I started this post, I can see improvement in following areas to name few:

1. Put stop loss, at least some thing. Earlier I use to put target, but no stop losses and seen huge losses. Still I'm loosing every day, but limited losses.

2. Started reading charts indepth (identifying support/resistance, different types of candles, yesterday noticed twice cup-handle reversal patterns, etc)

3. End of day, I'm seriously going through each trades in chart and seeing what I could have done to improve situation in my favor.

4. As required, I'm changing my strategies, my own based on my style.

5. Learnt usefulness and applicability of Moving Averages, RSI, CCI for oversold/overbought), Bollinger-band, ADX and MACD (these are my favorites ones). One important one Stochastic still I'm missing. But wanted to use those minimally and don't want to make situation complex.

6. Learnt different ways to calculate Stop Losses, (based on SAR, ATR, changing SL based on value of RSI, etc)

7. Learnt to accept my mistakes.

On top of this, as a bonus, I'm getting wonderful messages, support and guidance from senior and experienced professionals, like you, ethan hunt, timepass, soft_trader, TraderRavi and others.

All said, still every day I'm loosing real money.

I have investment in stocks too and that is doing well and improved because of this exercise a lot. But again that are not used as hedging against this option trade.

I do stock trading on EoD basis.

Thank you again for message and may be one day instead of doing naked option trading, I may opt for paired-based strategies. But before that, need to learn to think like professional.

:thanx: DanPickUp, and kindly keep posting messages, directly/indirectly we are learning lot from your experiences.

Regards,
Escape

 

[escape]

That was quick :clap:

After so many failures, finally first sign of success.

 

[augubhai]

Dear Dan,

Thank you for your post and showing insight.
Everyone needs to go through experience and learn lessons (bad or good). Even I'm on that same path, kept some budget for this exercise and as given in my first post, this is to learn tactic, and survive as long possible on this limited budget.

My current goal with this amount and exercise is not to get easy profits, but see and feel difficulties of options trading (the one with high risk and high reward). If I would have got easy profit in earlier stage, I may not have learnt disciplines (like putting Stop Losses, manage risk, money management).

Since day I started this post, I can see improvement in following areas to name few:

1. Put stop loss, at least some thing. Earlier I use to put target, but no stop losses and seen huge losses. Still I'm loosing every day, but limited losses.

2. Started reading charts indepth (identifying support/resistance, different types of candles, yesterday noticed twice cup-handle reversal patterns, etc)

3. End of day, I'm seriously going through each trades in chart and seeing what I could have done to improve situation in my favor.

4. As required, I'm changing my strategies, my own based on my style.

5. Learnt usefulness and applicability of Moving Averages, RSI, CCI for oversold/overbought), Bollinger-band, ADX and MACD (these are my favorites ones). One important one Stochastic still I'm missing. But wanted to use those minimally and don't want to make situation complex.

6. Learnt different ways to calculate Stop Losses, (based on SAR, ATR, changing SL based on value of RSI, etc)

7. Learnt to accept my mistakes.

On top of this, as a bonus, I'm getting wonderful messages, support and guidance from senior and experienced professionals, like you, ethan hunt, timepass, soft_trader, TraderRavi and others.

All said, still every day I'm loosing real money.

I have investment in stocks too and that is doing well and improved because of this exercise a lot. But again that are not used as hedging against this option trade.

I do stock trading on EoD basis.

Thank you again for message and may be one day instead of doing naked option trading, I may opt for paired-based strategies. But before that, need to learn to think like professional.

:thanx: DanPickUp, and kindly keep posting messages, directly/indirectly we are learning lot from your experiences.

Regards,
Escape

Wow!! Are we twins or what? I started with the same thoughts about 6 weeks back. Tried a lot of stuff. I have put all that in my diary. (don't bother to go through the diary, it's just a lot of discarded confusion)

At the end of it, I have learnt nothing additional about the market, and probably never will. But I have learnt a lot about myself, and I think I am the key to me succeeding in the market. (my attempt at zen

I would tell you more, but first let me find the key to success.

 

[escape]

Wow!! Are we twins or what? I started with the same thoughts about 6 weeks back. Tried a lot of stuff. I have put all that in my diary. (don't bother to go through the diary, it's just a lot of discarded confusion)

At the end of it, I have learnt nothing additional about the market, and probably never will. But I have learnt a lot about myself, and I think I am the key to me succeeding in the market. (my attempt at zen

I would tell you more, but first let me find the key to success.

Hi Augubhai, I'm silently following your diary/trades too. I believe most important skill required for trading or for any other purpose is discipline, and you are following it, your post reflects that.

Secondly honesty is very important. Irrespective of so many wrong trades, we both are posting it, and accepting mistakes.

Sometime I wonder, if someone follows our trade but in reverse direction, will earn lot !!!

You very well said:
I think I am the key to me succeeding in the market.

Keep posting messages and hope we will have consistence positive trades.