Nifty : Real time discussions...!

[sumeetsj]

Rising Volatility,

1. Options writers need to be cautious
2. We might see strong up moves(followed by down moves)
3. Stops need to be placed carefully now

 

[ranger123]

@ Ranger

Why u dont like to carry short straddles for weekend is a mystery to me. market rarely gap more than 60 points in one direction and that normally causes a 10-12 point rise in straddle. Gaps are a lot easier to play as u can afford partial exits or enforce damage control as one segment of the players are under considerable stress and gaps either get filled in the first hour or act as trend determinant. Either ways, u can recover ur 10-12 point easily and that too within the first hour itself.

There is one exercise that i think can improve expectations or know what to expect when you short straddles with the hope of milking it for few safe points. download the nse futures bhavcopy and make a excel sheet and make a study of the price of straddles / OTM strangles at various price points and how much they wither with time. I also used to maintain the vix lvl for the corresponding day and the OI of NF.

Keep in mind, TA is all about studying past price movement with the premise that history repeats itself. I think your fear stems from the fact that u dont know where to cut for pain of loss from straddle. AW10 advises using %-age based stops as that can help u know where u should set the limit of maximum tolerable damage. that %-age will come from ur study on excel sheet.

I did this exercise long time back and to my surprise i found that shorting straddles and keeping it for a period of 2-3 weeks generated good profit unless we saw a rapid rise in vix / shift in OI. Then i found a co relation of the price of the straddle compared to location of close compared to where it was WRT its present EOD range.

I lost lot of my research work in a hdd crash and never really felt the need to revive it but your approach reminded me of a time when i used to write a straddle and use it as a hedge for nf positional. That method worked like a charm and i really cant remember a valid reason for not using that any more. I used to make more points with lesser stress using simple trend lines.

just food for your thought...!

Sir,

Thank you for your posting you write good thinig in detail also.

Sir, I first do share trading in Rel Indu share only in before the one year. Then I come here at the TJ and read many good things about tradin. Then I meet great fellow like you, AW10, TNSN, SG and Danpickup sir. Then I really start like Dansir and his thinkgin. It is difficult for me to understand he first but then he give me good advise on mails and teach me many thing in Option trading. I use Option oracal for options greek numbers, I do many study in this and guide by Dan sir I understand that I can control my risk by tradin options. Than I also follow TNSN sir thread and he thinkgin change me from direction and risk taking trader to calclative risk and risk control trader. I get his idea of start a netral trade first and then go for direction trade by exit one opition in a step step way if my netral position give me profit. So I can use this profit to put my stop lose in my direction trading.

Sir, my trading stil is not exciting now, early I has to do more trade in a day, now I do very less and also not see the nifty index for long time also. Now becasue I post in this thread I has see the nifty index more times in a day time. As you also say in your before post that you do not has reason for not do such trades, I has stick with this stile from 8 months and becasue og this way of trade I get time to do my service also.

Sir you say that I carry my positon on satruday and sunday. I now that I can earn profit but, I has stop this by 4 monhts because I said in my before post that I has happy to spend good time with my family if I has no open posiion on satruday and sunday. I get relax mind and do not want tension and sit in before the computer and tv on holiday.

Thank you sir again and sorry for my English mistake. I learn English after I start to do service and not in school and college.

 

[ranger123]

Who are
1. Carrying Longs (Futs and/or Options) over weekend and why?
2. Carrying Shorts (Futs and/or Options) over weekend and why?

I not carry any tension on week end. I only carry happyness on the week end.

Thank you and best of luck.

 

[kevin_shah]

Thanks Pride
Actually this is my entirely own belief that has developed over the months I am trading:

First of all I actually trade based on momentum, volatility and direction...Momentum comes from some momentum based indicator in my case its Woodies CCI indicator, Volatility comes from understanding volume and its flow and the Direction comes from Price Action of the market plus my own personal view from experience that i am good at but still learning

If every thing falls in place i do trade, if not i stay away, many times this gives me false view as i am still learning them..But that take cares of my looses as i keep them minimum

Secondly , due to a training by a Professional trader as mentioned in my post, i try to use a SET AND FORGET STYLE of trading
it means i go by my signal or wait for the conditions to be in my favour then plan accordingly and set realistic targets and stoploss. execute them and relax

But...as having a control of ur trade is a good strategy for succesful trading ...so every hour or so i try to assess my situation and adjust my stops ONLY WHEN NECCESARY
In today's case i will be happy if my stops get hit because that means i am wrong and i have a new trade to do....

I try not to panic when it moves against my direction as i have predetermined leeway to my trade..that is every regular periods i adjust accordingly as being flexible is an art. ( i use ATRs for that)

Actually I believe in this :


"The logic of “set and forget” trading is this; if your trading edge is present then you execute your edge and do not involve yourself further in the process unless you have previously defined the action in your trading plan. Traders that decide to mess with or tweak their trade once they enter it almost always kick start an emotional rollercoaster that leads to overtrading, increasing position size, moving their stop loss further from their entry, or moving their profit target further out. These actions almost always cause the trader to lose money, the reason why is because they were not objectively thought out, but were influenced by an emotional reaction that was caused by trying to control the uncontrollable."

written By Nial Fuller

Again some good thoughts on Trade Management from Nial fuller in continuation from the above post

The goal of any successful Forex trader is to get the most out of every trade they enter. The way that you give yourself the best chance to get the most out of every trade is by behaving in a logical and consistent manner and pre-planning all aspects of your Forex trade management.
There is a fine line between being a trader who lives in hope and being a trader who accepts the reality of the market by taking what the market offers them. Before you get into a trade you need to ask the question, “how far do I realistically think this market can move before a substantial correction occurs?” Once you master price action trading and learn to read the levels and dynamics in the market, you will be able to make a pretty accurate estimation of the potential of any setup before you enter. And keep in mind you are ALWAYS LESS EMOTIONAL before you enter a trade than at any time during it. So, you have to assume that long-term, you are going to get the most out of every trade by managing it as much as you can before you enter it, rather than trying to manage it “on the fly”.
Listen to the signal and the market conditions; if there’s a price action setup at a clean breakout level or an obvious trend with strong momentum, trailing your stop into a 1 to 4 winner may have its reward. However, in a more congested or range-bound “not-so-sure” market situation, it’s not a good idea to pray and hope, trying to milk every last dollar out of a trade. So you see, there is a certain amount of discretion involved in trade management, it’s most important to read the market conditions before you enter a trade and decide how best to manage the trade at that time while leaving open the possibility of adjusting your exit strategy if any obvious reversal signals occur in the course of the trade or if the market conditions change drastically. However, that said, it’s almost always better to pre-plan everything and then set and forget your Forex trades. Trading in this way allows you to see how your trading edge plays out over the long-term with no “outside” interference, and it prevents you from trying to force your will on the uncontrollable market."

This restricts the trader's "Wishful thinking" and "Hopes" , these i call it as "Gambler's Fallacy"
Anyways Trying myself hard to understand those words above and keep my emotions in Check...( god only knows when i would be complete emotionless while trading")

 

[linkon7]

gif upload

Structure for the day..!

Key ref lvl
5405 - 5398 on the up side
5361on the down side

 

[trillian]

Normal Variation day likely .

shorted @ 5565 sl days high (5580)

 

[linkon7]

bot 5400 call at 51...sl 59...!

if sl hit.. will short nf... if it drifts and hits...then will have to re-asses...!

 

[msa5678]

Normal Variation day likely .

shorted @ 5565 sl days high (5580)

Hi trillian ,

I think you mean "shorted @ 5365", or are you referring to your previous position.

 

[linkon7]

sl hit...!

 

[fabrics]

bot 5400 call at 51...sl 59...!

if sl hit.. will short nf... if it drifts and hits...then will have to re-asses...!

did u buy 5400 @ 51 .Then why do u SL 59?