My stupid trading strategy

[MichealFlether214]

I think the only problem you have here is that you are risking too much on leverage, this strategy can become a nightmare in just no time. I would stay away from this as far as I can, unless I can afford the loss, ofcourse!

 

[jxcess]

Hi

Have you ever thought to use options instead of putting 50'000 R on the table for one or two shares?

Hi Dan,

Can u please explain how I can use options to do intraday? How do I follow my earlier strategy using options? I am finding it really confusing to trade with calls and puts as calls and puts are just contracts not the actual stock.

Thanks

 

[4xpipcounter]

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As you reason your approach, it would seem to make sense. IMO (And I'm going to stress that, because nothing here is ensconced in fact.), the methodology, as you state it, becomes more predictive than the methodological approach that is needed towards the markets. I trade forex, and I'm posting a chart of the EUR/AUD to show my point.

Those huge moves that you are talking about usually happen at the beginning of a trend. Look at the chart and tell me how you could predict how to trade the countertrend in any of the moves. From a technical chartist point of view, the strong moves happen in extreme cases of the dynamic of the trend itself. The cycle within the trend becomes exhausted, then just gives it up.
After that has happened, it usually takes more than one candle to complete such a move. You get the first huge candle. Then if you jump in at that time, and then it pulls back on you by only 50% of the original candle, your position is looking ugly.

I'd love for you to post your findings if you find success. Let me add on to what Dan said. There is nothing stupid about a winning strategy. If your idea fattens your wallet, I'd dare anyone to call it stupid.

 

[jxcess]

As you reason your approach, it would seem to make sense. IMO (And I'm going to stress that, because nothing here is ensconced in fact.), the methodology, as you state it, becomes more predictive than the methodological approach that is needed towards the markets. I trade forex, and I'm posting a chart of the EUR/AUD to show my point.

Those huge moves that you are talking about usually happen at the beginning of a trend. Look at the chart and tell me how you could predict how to trade the countertrend in any of the moves. From a technical chartist point of view, the strong moves happen in extreme cases of the dynamic of the trend itself. The cycle within the trend becomes exhausted, then just gives it up.
After that has happened, it usually takes more than one candle to complete such a move. You get the first huge candle. Then if you jump in at that time, and then it pulls back on you by only 50% of the original candle, your position is looking ugly.

I'd love for you to post your findings if you find success. Let me add on to what Dan said. There is nothing stupid about a winning strategy. If your idea fattens your wallet, I'd dare anyone to call it stupid.

Hi,
Please don't laugh at what I am about to tell u but honestly i dont know anything about candlesticks and trendlines. My trading style is like a gamble. I just see yesterday's top gainers and losers and make decisions based on that. For example yesterday hindalco had gained almost 10% which is very unusual as stocks on an average don't gain more than 5% per day (this is my observation). So I felt that since it has gained by such a huge margin it will obviously go down today, which it did and so I made a cool profit of 1% by shorting hindalco. I could have earned more but I don't want to become very greedy.

 

[4xpipcounter]

No one methodology is right for everyone. You may not use candlesticks and TL's to trade with, and if you find what is right for you, then they are not necessary.
Again, I'd like to see your success over the long haul in using that method as you described. Considering I'm now subscribed to your thread, I'll be watching and looking forward to it.

Hi,
Please don't laugh at what I am about to tell u but honestly i dont know anything about candlesticks and trendlines. My trading style is like a gamble. I just see yesterday's top gainers and losers and make decisions based on that. For example yesterday hindalco had gained almost 10% which is very unusual as stocks on an average don't gain more than 5% per day (this is my observation). So I felt that since it has gained by such a huge margin it will obviously go down today, which it did and so I made a cool profit of 1% by shorting hindalco. I could have earned more but I don't want to become very greedy.

 

[DanPickUp]

Hi Dan,

Can u please explain how I can use options to do intraday? How do I follow my earlier strategy using options? I am finding it really confusing to trade with calls and puts as calls and puts are just contracts not the actual stock.

Thanks

Hi Jxcess

The methodology you use for your stock picking you also can use to PickUp options. You can do that with the same software you use now as the options you choose are bound on the stock gainers or losers you choose to trade.

How?

http://in.finance.yahoo.com/echarts...osshair=on;ohlcvalues=0;logscale=off;source=;

In the chart I see, that the low from Hindalco was on a strike level of 113.

Nov. 28. 2011, it was on a high at strike level 125.

To not make it to complicate, I will give a simple explanation:

Depending on the option strikes on Hindalco offered to the public by your exchange and what is allowed and what is not allowed, it is your choice to choose the 125 put to go long or 125 call to go short, which both are at the money, or to sell the stock at 125.

After you choosed your option, you calculate the price you want to have for this option as you calculate the price for your stock. ( Calculating option prices is a bit different compare to stock, but this is not the subject here, as it gets to complicated )

I know, not so easy like just playing the pure 1% game with the stock, but still a way to trade with less risk.

All the best and further good success with your trades

DanPickUp

 

[4xpipcounter]

Great line, Dan. I caught your pun in the first line.

Hi Jxcess

The methodology you use for your stock picking you also can use to PickUp options. You can do that with the same software you use now as the options you choose are bound on the stock gainers or losers you choose to trade.

How?

http://in.finance.yahoo.com/echarts...osshair=on;ohlcvalues=0;logscale=off;source=;

In the chart I see, that the low from Hindalco was on a strike level of 113.

Nov. 28. 2011, it was on a high at strike level 125.

To not make it to complicate, I will give a simple explanation:

Depending on the option strikes on Hindalco offered to the public by your exchange and what is allowed and what is not allowed, it is your choice to choose the 125 put to go long or 125 call to go short, which both are at the money, or to sell the stock at 125.

After you choosed your option, you calculate the price you want to have for this option as you calculate the price for your stock. ( Calculating option prices is a bit different compare to stock, but this is not the subject here, as it gets to complicated )

I know, not so easy like just playing the pure 1% game with the stock, but still a way to trade with less risk.

All the best and further good success with your trades

DanPickUp

 

[jxcess]

I decided to follow some of the advice given by some senior members here for trading in options. But I got really confused when I tried trading with them. I'll just post my query here. Please guide me guys. Let's say I want to trade in American options as I want to do intraday trading. So I want to purchase a call option for HCL. By my earlier startegy I would have purchased HCL at Rs 415 and sold at Rs 420 (1% profit). How do I do so in options? Given below is my terminal with geojit. Now when I do a search for an american option for HCL I put in the following details, Exchange: NSEFO, SearchBy: Name, Symbol: HCL, Expiration date: <blank>, Instrument: OPTSTK, Option: CA, Strike Price: <blank>. But when I click search i get an error "Sorry no data found". Can u please tell me what I m doing wrong? I am able to get data for European options but not American.

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[SexyTrader]

I decided to follow some of the advice given by some senior members here for trading in options. But I got really confused when I tried trading with them. I'll just post my query here. Please guide me guys. Let's say I want to trade in American options as I want to do intraday trading. So I want to purchase a call option for HCL. By my earlier startegy I would have purchased HCL at Rs 415 and sold at Rs 420 (1% profit). How do I do so in options? Given below is my terminal with geojit. Now when I do a search for an american option for HCL I put in the following details, Exchange: NSEFO, SearchBy: Name, Symbol: HCL, Expiration date: <blank>, Instrument: OPTSTK, Option: CA, Strike Price: <blank>. But when I click search i get an error "Sorry no data found". Can u please tell me what I m doing wrong? I am able to get data for European options but not American.

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Dont trade Options if you do not have a clue....you can lose heavily if the trade goes against you!

Secondly, better not trade with any real money....just observe and just watch the markets on a daily basis.

Options are good for leverage, definitely NOT for someone starting out at trading!

Your strategy is not stupid, but no one knows which stock will rise when and fall when ! There lies the problem...

No TA/FA analyst can assure what will actually happen, all that can be said that its possible to predict ONLY to a certain extent in trading!

 

[jxcess]

Dont trade Options if you do not have a clue....you can lose heavily if the trade goes against you!

Secondly, better not trade with any real money....just observe and just watch the markets on a daily basis.

Options are good for leverage, definitely NOT for someone starting out at trading!

Your strategy is not stupid, but no one knows which stock will rise when and fall when ! There lies the problem...

No TA/FA analyst can assure what will actually happen, all that can be said that its possible to predict ONLY to a certain extent in trading!

Well I am not going to jump into options right away but just for an educational purpose can you please answer my above query? Thanks