A topsy turvy kind of day. NIFTY opened higher and then somewhere along the way decided to move lower.
And how it went.
More than 100 points at one stage. Then it made a recovery and stopped just above 11600.
High of the day was 11710.30 and the low was 11549.10. The close was 106 points lower than the high of the day. Let us not read too much into these numbers. Everything pointed to an upmove yesterday and it happened. suddenly the selling started. Now the experts tell us that it was due to rising crude oil prices. As if crude prices were not rising in the previous week. Markets can go either up or down and we can keep listening to same set of reasons.
For us, the day brought a little hope. The loss is slightly reduced.
But these positions can change for better or worse in a day. Let us see how it goes from here.
New Trades for the Day :
This blog is as much about teaching as it is about finding trades to make money.
One of the important lesson is to stay patient and control your risks. Protection of capital is very important. It is not that every opportunity that looks good will eventually come good. So adding more trades does not give a big benefit. We are already in 7 trades which is a reasonably good number. If 2-3 trades go right, there is every chance to be profitable.
We do not add to these trades till we see some of them doing well.
This is a lesson in discipline and patience.
Just observe the current trades.
Trade cautiously, trade profitably.
Disclaimer: This post and examples are for teaching purpose only and are not meant as advice/suggestion to trade in these stocks. Trading in Futures and Options can lead to big losses and should be done with appropriate knowledge and advice only. Mentioning the stocks here does not imply that I have a trading position or likely to take a trade in these stocks.
vishal agarwal April 9, 2019 at 4:38 pm
The days such as today are the most damaging for the options trades and for the emotions of the trader. At one point you feel everything is going your way and you apply the newly learnt lesson of patience and riding the trend on correct trades. Then suddenly everything goes for a toss. You see your options getting halved in value which had even doubled at one point. What do you do at that point? How do keep yourself motivated?Reply
Such are the ways of the market. It rewards those who are in for a longer term. It will keep on playing such games till you reach a point where you either give up or stop getting impacted by such ups n downs and get comfortable with giving up gains with no negative emotions. It is then market rewards your patience with big gains.
arnab April 9, 2019 at 7:08 pm
The market rewards them who are for longer term!!!No, I don’t think so, I bought bajaj-auto 2700 pe at 20 when it was at 2920, it swiftly ran down to 2850, then 2840 where the option went to 28, then it bounced back several days at the same price(around 2845-50-60) while nifty went up and up, no stopping, but this never fell….the option value went from 28 to 22 to 19, 18..then 15..today it shot to 2860 first, when i sold it off at 13, thereby loss of 2k, now its at 2920 again and option is at 8, do you think long player would benefit? No i don’t think so, you should only be long as long as signal’s say to be long. Looking back that should have been a warning for me, as this guy is not falling down in any case, so i should have got out at low loss, maybe hardly loss in hundred’s, but because i persisted, the loss went to 2k.Reply
admin April 9, 2019 at 7:14 pm
We shall review this comment after few days.Reply
For the record, I am not in agreement with the views expressed though I fully understand the pain of loss.
Santosh April 9, 2019 at 10:25 pm
May be that’s the reason we should try to keep theta on our sideReply
admin April 10, 2019 at 7:34 am
If you are an option buyer, theta is never on your side. One has to become option writer for that.