NIFTY Options Trading by RAJ

[mohan.sic]

Hi I have devised strategy that is back-tested successfully. Below is the performance.
Any suggestion?

my sugestion is come up with the strategy. Not the results.
If strategy cant be shared, no issues. But how to suggest on something that we dont know.

 

[ganeshsinghmba]

My strategy is based on certain assumption and advantageous properties of options.
1. I find true the fact that the more you trade the more your broker will gain and the less you trade only then you will gain more. So I believe in taking position in market by holding option (buy option on expiry and sell on its expiry) and do not believe in trading as per technical analysis.
2. Once you take position stay away from the market else it will change your decision (position) through its powerful emotional roller coaster. In this way you don't have to cut your loss (since it is already limited) and profit (it is not limited). Take position emotionless. Emotion is the most dangerous enemy of trader.
3. I believe that market goes up in long term with ups and downs in short term, so give more value on Call options. Call options will give you more than Put options.
4. In my strategy minimum investment is 2% and maximum is 20% of your total money. Means you have to be wrong 5 times continuously to loose all of your money which has not happened till now in my strategy, maximum is 40% and maximum two times happened in my strategy.
5. Generally if 40% to 50% of your options goes profitable, your overall strategy is profitable. My strategy provided 60% profitable options.
6. I have identified some patterns (behaviour) of movement in nifty, and on the basis of these patterns I decide which (call or put) option to be bought and in what quantity. These two decisions are main things of the strategy and rest with me. In future when my strategy will go profitable I will definitely share it in this forum. I will be sharing my position at every expiry.

 

[healthraj]

My strategy is based on certain assumption and advantageous properties of options.
1. I find true the fact that the more you trade the more your broker will gain and the less you trade only then you will gain more. So I believe in taking position in market by holding option (buy option on expiry and sell on its expiry) and do not believe in trading as per technical analysis.
2. Once you take position stay away from the market else it will change your decision (position) through its powerful emotional roller coaster. In this way you don't have to cut your loss (since it is already limited) and profit (it is not limited). Take position emotionless. Emotion is the most dangerous enemy of trader.
3. I believe that market goes up in long term with ups and downs in short term, so give more value on Call options. Call options will give you more than Put options.
4. In my strategy minimum investment is 2% and maximum is 20% of your total money. Means you have to be wrong 5 times continuously to loose all of your money which has not happened till now in my strategy, maximum is 40% and maximum two times happened in my strategy.
5. Generally if 40% to 50% of your options goes profitable, your overall strategy is profitable. My strategy provided 60% profitable options.
6. I have identified some patterns (behaviour) of movement in nifty, and on the basis of these patterns I decide which (call or put) option to be bought and in what quantity. These two decisions are main things of the strategy and rest with me. In future when my strategy will go profitable I will definitely share it in this forum. I will be sharing my position at every expiry.

All is Well except point 3. Most of the traders have gone bankrupt in the BEAR markets. As they say when the markets GO UP it goes slowly But when it goes down it goes down like a Rocket. So if you have a strategy, give 80% importance to Call Options but also 20% importance to Put options.

As per your strategy, it is better you follow either Daily or Weekly charts

 

[soumanag]

All is Well except point 3. Most of the traders have gone bankrupt in the BEAR markets. As they say when the markets GO UP it goes slowly But when it goes down it goes down like a Rocket. So if you have a strategy, give 80% importance to Call Options but also 20% importance to Put options.

As per your strategy, it is better you follow either Daily or Weekly charts

I totally agree with Raj.

I see that the maximum losses occurred during the Bear market. Plus I was totally confused regarding the last trade, day trade in NIFTY option during expiry has become extremely risky and some what like gambling. Further it was totally different kind.
I have tried buy and hold in past but after loosing a lot of money... I mean a LOT, I gave up. I appreciate the risk management strategy outlined in the strategy and think it is very good. However unless we know more how strikes are selected so early in the series, I would be very skeptical. So hope Ganesh will elaborate more on this in future posts.

 

[stock72]

I totally agree with Raj.

I see that the maximum losses occurred during the Bear market. Plus I was totally confused regarding the last trade, day trade in NIFTY option during expiry has become extremely risky and some what like gambling. Further it was totally different kind.
I have tried buy and hold in past but after loosing a lot of money... I mean a LOT, I gave up. I appreciate the risk management strategy outlined in the strategy and think it is very good. However unless we know more how strikes are selected so early in the series, I would be very skeptical. So hope Ganesh will elaborate more on this in future posts.

The trade date is the expiry date ..but he buy the next month option and hold it . Since last trade he bought only 1lots means as per system the market the chance of going up and going down might be of 60:40 ratio

 

[ganeshsinghmba]

I totally agree with Raj.

I see that the maximum losses occurred during the Bear market. Plus I was totally confused regarding the last trade, day trade in NIFTY option during expiry has become extremely risky and some what like gambling. Further it was totally different kind.
I have tried buy and hold in past but after loosing a lot of money... I mean a LOT, I gave up. I appreciate the risk management strategy outlined in the strategy and think it is very good. However unless we know more how strikes are selected so early in the series, I would be very skeptical. So hope Ganesh will elaborate more on this in future posts.

Don't be confused. I elaborate " on 26 march 2015 at 3:15 PM (on closing of march15 series) buy 1 call option of next series (April15 series) @ 215.95 (+-10 points depending on market at that time)." As far as strike price is concerned it should be ATM option. I hope You will get it.
You talked about losses in bear market. Please provide me the duration of that bear market, and I provide you the result.

 

[soumanag]

At 2:00 IST
MP @ 8500.
Market has assumed a bullish stance due to substantial Put addition at 8400 which has emerged as MAX Put OI and may act as a support for the rest of the weak.
I saw call volume picking up at 8600 & 8700 though OI change is minuscule. Might be slight call unwinding. So further bullishness.
Weekly resistance @ 8600 with Max Call OI.
Any positive news from Yemen would cause the market to break this on upside. So will be glued to BBC / Al Jaazeera this evening
We may see further bullishness till the results start coming out (which in all probability would be below par) and then see market regressing to MP.

In the morning both VIX and NIFTY were up. I think this is due to OTM call IV appreciating substantially. Presently VIX is down slightly @14.5.
Will be watching the price action till 3:15 to take any fresh position after the FII mood is clear to me.

 

[jagankris]

Don't be confused. I elaborate " on 26 march 2015 at 3:15 PM (on closing of march15 series) buy 1 call option of next series (April15 series) @ 215.95 (+-10 points depending on market at that time)." As far as strike price is concerned it should be ATM option. I hope You will get it.
You talked about losses in bear market. Please provide me the duration of that bear market, and I provide you the result.

Check for the years 2008,2011,2012,2013.

 

[soumanag]

Don't be confused. I elaborate " on 26 march 2015 at 3:15 PM (on closing of march15 series) buy 1 call option of next series (April15 series) @ 215.95 (+-10 points depending on market at that time)." As far as strike price is concerned it should be ATM option. I hope You will get it.
You talked about losses in bear market. Please provide me the duration of that bear market, and I provide you the result.

Ok my bad should have noticed the option price and realized it was for next series. Actually term expiry today had thrown me off.

Regarding ATM option: how do you decide between PUT / CALL
I am aware that you promised to put forward further details in future ..... but I am being greedy because the results are quite promising.
Finally regarding duration of bear market I am not sure if you can get expiry data for options for 2009-10 i.e when we went through a prolonged bear period.
Waiting eagerly for further posts and know the strategy. Wanted to PM you but didn't get that option. Don't know why

 

[soumanag]

Hi guys,

Below is the link to the Bank Nifty OI analysis visual representation excel if any one is interested.

http://www.X.com/file/D-qPBP2eba/BNF_Minimum_analysis$
Replace X with 4shared and $ with .html

It is a work in progress so please pardon the crudeness. The excel is developed based on Raj's original idea so all credit goes to him.