April 2019 — We Buy Options — Day 10

Nifty ended lower by 87 points.

In the morning we had read about bullish candlesticks etc on various forums. As usual, market did not care and by evening same people wrote about bearish candlesticks. It is real fun and enjoyment to read those words of wisdom.

Once again, we are below 11600. We were here at some stage two days ago as well. markets are dynamic even when going nowhere.

This is how the journey of the day turned out:

NIFTY going down like this should have brought cheer to us. We are the people with 6 PUTS and 1 CALL trades.

The move brought down the INDUSINDBK. It is acceptable and was expected.

What spoiled the trades was that stocks like BIOCON and BRITANNIA ended up positive. TATASTEEL and TATAMOTORS are so far gone that they can not give us much grief now. RELCAPITL too did not fall with the index.

For us, the day being negative did not bring any cheer.

The position worsened by another Rs. 3000 as compared to previous day.

We stay with the trades.

No new trade today.

Watch for any big move in any of them it happens. If not, we just hold the fort for another day.

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.

Comments

arnab April 11, 2019 at 11:43 am

Strange, prediction is worse off than blindly dart shooting, i think it would have been better to do exactly the opposite trade, sad but true i guess

vishal agarwal April 11, 2019 at 12:45 pm

I hope your question gets answered after reading this.
https://www.quora.com/I-have-been-consistently-losing-money-in-the-stock-market-will-I-consistently-win-if-I-do-the-exact-opposite
Reply

arnab April 11, 2019 at 4:35 pm

the answer says nothing, its the same way manager talks to an employee, the employee goes, have a talk, comes back, net result: nothing

vishal agarwal April 11, 2019 at 6:57 pm

That is what Sir is trying to teach every one. Be your own manager, you don’t need to rely on any one for trade tips. Deal is simple. Have a setup that works for you, trust that setup and trade accordingly. Sir is trying to educate people about A setup that has worked for him. You are free to adopt that setup A or have your own setup B.
Reply
admin April 12, 2019 at 8:08 am

Dear Arnab,

The question there was that if someone just does the opposite of what he was doing so far, will he become profitable. The answer mentioned that— If the trader actually knew what he was doing and then does the opposite, probably it may work. The main problem is that traders do not know what they are doing. Like if you are following tips from someone and losing. Stopping following the tips will at best stop the losses. It will not make you profitable.

Having trust in a method is the first and foremost requirement for profitable trading.

Cheers.
Reply

sudip April 11, 2019 at 5:26 pm

I have been following this blog for some time. I have a feeling this options trading is nothing but bull s*. I don’t care whether you publish my comment or not, but its a gambling where its not you win some or lose some, nothing works, long term, short term, whatever term, its always losing…people say you will win big in options, noooooooo, never, you lose everything in options, including your sleep, i lost 23k, this time and have lost many many times, neither i want anybody’s advice in recovering it too, cause it never works, best way to learn is from others experiences. And every experience says you lose, period. I rest my case. Maybe I will return again, but after backtesting my strategy, more thoroughly, better not to trade than losing money.

admin April 12, 2019 at 8:12 am

Thanks for sharing your thoughts. Your conclusions are based on your own experiences with options trading. I agree that it is a tough nut to crack. Everyone is entitled to own views and I respect them. There is no reason why your comment will not be published. You are not the first person to have these views about options trading.

Please continue visiting these pages even while you are not trading.

Your thoughts are always welcome.

cheers.
Reply

JERRY April 11, 2019 at 6:48 pm

Sudip, I can understand your frustration. A few years ago I was in a similar situation. I traded in stock & nifty options by myself and also by investing with a trader. I lost both the ways, an amount totaling about 2 lacs. At that time I also thought options buying is “bakwaas” and gave up trading altogether. Then after a gap of 3 years I happened to read Mr. Pramod Kumar’s blog OptionsNext and it aroused my interest once again. I followed the blog and the suggested trades for 3 months and then in September 2018 restarted my trading journey with a small amount of Rs 30,000 and added another Rs 20,000 a couple of months later. I am happy to inform you that today this Rs 50,000 has become 2.50 lacs in a period of just 7 months. I have been taking some (not all) of the suggested trades on the blog and also a few of my own. But have been following, or rather trying to follow, sir’s method of making the right trades count by staying in them for long. Initially it was very very difficult. In fact even now it is not easy. But I hope to improve further on controlling my fear and impatience.
In conclusion I will say that the method works but we need to cash in big time on the right trades. For this we need to be in control of our emotions. So don’t lose heart and carry on.
Cheers!!!

admin April 12, 2019 at 8:15 am

Dear Jerry,

Thanks for sharing your views.

Like I said in my response to Sudip, opinions are formed on the basis of personal experiences. We can not change the perceptions.

I am taking note of the related comments on the subject and a post devoted to the points raised here will be posted on either this Sunday or Monday.

Cheers.
Reply

Krishna April 11, 2019 at 11:56 pm

@ arnab & sudip – no strategy is full proof. Even though I feel it’s a good strategy of weakness over 30 days & 7 days ; but blindly following that would lead to losses only . Along with that we are trying to gauge the fundamentals , momentum , sector wise position & chances of reversal . It’s all assumption & reading the pulse of specific stocks which if we read correct even at 1/3 times we can be in profits .
Readers & followers what’s ur take ?

admin April 12, 2019 at 8:18 am

Thanks for sharing your views.
Reply

kishan April 12, 2019 at 12:55 am

one problem I noticed with the approach followed in this blog is : mostly 1 or 2 out of 10 stocks only mainly move in the right trend direction (if at all it moves). if somehow we missed that train; you will loose everything. it had happened to me for 3 months (I had the purchased the rest 8 stocks which didn’t move and for some reasons I couldn’t buy the 2 stocks which moved) and now stopped following this system.
I see a flaw in the selection logic; where the stock is at the verge of trend change; this will say strong trend. if you cross check out of 100; 90 did trend change.
Be careful if you don’t want to loose sleep.

admin April 12, 2019 at 8:17 am

Dear Kishan,

You have raised some interesting issues. These will be addressed in a post most likely this Sunday or latest by Monday.

Cheers.
Reply
Raveendran K A April 12, 2019 at 8:41 am

I agree with Kishan. The selection criteria is somewhat flawed. I’ll write about it in detail later .
Reply
- admin April 12, 2019 at 9:07 am
  
  Dear Raveendran,
  
  Finding flaws is easiest thing in the world. That is what we do all the time. Forget the big profit in September. Such things are one off and luck also plays a role at such times.
  
  I am just comparing the results of current bad period.
  
  Even if we add up the loss of December, February and March it comes to about Rs. 104000. Add the current month too considering the entire amount in trade as loss. That makes it a loss of Rs. 162000 in 4 loss making months. Now just add 1 profitable month of January to it and this loss gets wiped out.
  
  It is good to find faults with a method where 1 month of profit takes care of 4 losing months.
  
  Look at the results in totality, let us not pick and choose.
  
  Please suggest something which works, we know the flaws already.
  
  I will wait for your suggestions.
  Reply

arnab April 11, 2019 at 11:43 am

Strange, prediction is worse off than blindly dart shooting, i think it would have been better to do exactly the opposite trade, sad but true i guess
- vishal agarwal April 11, 2019 at 12:45 pm
  
  I hope your question gets answered after reading this.
  https://www.quora.com/I-have-been-consistently-losing-money-in-the-stock-market-will-I-consistently-win-if-I-do-the-exact-opposite
arnab April 11, 2019 at 4:35 pm

the answer says nothing, its the same way manager talks to an employee, the employee goes, have a talk, comes back, net result: nothing
- vishal agarwal April 11, 2019 at 6:57 pm
  
  That is what Sir is trying to teach every one. Be your own manager, you don’t need to rely on any one for trade tips. Deal is simple. Have a setup that works for you, trust that setup and trade accordingly. Sir is trying to educate people about A setup that has worked for him. You are free to adopt that setup A or have your own setup B.
- admin April 12, 2019 at 8:08 am
  
  Dear Arnab,
  
  The question there was that if someone just does the opposite of what he was doing so far, will he become profitable. The answer mentioned that— If the trader actually knew what he was doing and then does the opposite, probably it may work. The main problem is that traders do not know what they are doing. Like if you are following tips from someone and losing. Stopping following the tips will at best stop the losses. It will not make you profitable.
  
  Having trust in a method is the first and foremost requirement for profitable trading.
  
  Cheers.
sudip April 11, 2019 at 5:26 pm

I have been following this blog for some time. I have a feeling this options trading is nothing but bull s*. I don’t care whether you publish my comment or not, but its a gambling where its not you win some or lose some, nothing works, long term, short term, whatever term, its always losing…people say you will win big in options, noooooooo, never, you lose everything in options, including your sleep, i lost 23k, this time and have lost many many times, neither i want anybody’s advice in recovering it too, cause it never works, best way to learn is from others experiences. And every experience says you lose, period. I rest my case. Maybe I will return again, but after backtesting my strategy, more thoroughly, better not to trade than losing money.
- admin April 12, 2019 at 8:12 am
  
  Thanks for sharing your thoughts. Your conclusions are based on your own experiences with options trading. I agree that it is a tough nut to crack. Everyone is entitled to own views and I respect them. There is no reason why your comment will not be published. You are not the first person to have these views about options trading.
  
  Please continue visiting these pages even while you are not trading.
  
  Your thoughts are always welcome.
  
  cheers.
JERRY April 11, 2019 at 6:48 pm

Sudip, I can understand your frustration. A few years ago I was in a similar situation. I traded in stock & nifty options by myself and also by investing with a trader. I lost both the ways, an amount totaling about 2 lacs. At that time I also thought options buying is “bakwaas” and gave up trading altogether. Then after a gap of 3 years I happened to read Mr. Pramod Kumar’s blog OptionsNext and it aroused my interest once again. I followed the blog and the suggested trades for 3 months and then in September 2018 restarted my trading journey with a small amount of Rs 30,000 and added another Rs 20,000 a couple of months later. I am happy to inform you that today this Rs 50,000 has become 2.50 lacs in a period of just 7 months. I have been taking some (not all) of the suggested trades on the blog and also a few of my own. But have been following, or rather trying to follow, sir’s method of making the right trades count by staying in them for long. Initially it was very very difficult. In fact even now it is not easy. But I hope to improve further on controlling my fear and impatience.
In conclusion I will say that the method works but we need to cash in big time on the right trades. For this we need to be in control of our emotions. So don’t lose heart and carry on.
Cheers!!!
- admin April 12, 2019 at 8:15 am
  
  Dear Jerry,
  
  Thanks for sharing your views.
  
  Like I said in my response to Sudip, opinions are formed on the basis of personal experiences. We can not change the perceptions.
  
  I am taking note of the related comments on the subject and a post devoted to the points raised here will be posted on either this Sunday or Monday.
  
  Cheers.
Krishna April 11, 2019 at 11:56 pm

@ arnab & sudip – no strategy is full proof. Even though I feel it’s a good strategy of weakness over 30 days & 7 days ; but blindly following that would lead to losses only . Along with that we are trying to gauge the fundamentals , momentum , sector wise position & chances of reversal . It’s all assumption & reading the pulse of specific stocks which if we read correct even at 1/3 times we can be in profits .
Readers & followers what’s ur take ?
- admin April 12, 2019 at 8:18 am
  
  Thanks for sharing your views.
kishan April 12, 2019 at 12:55 am

one problem I noticed with the approach followed in this blog is : mostly 1 or 2 out of 10 stocks only mainly move in the right trend direction (if at all it moves). if somehow we missed that train; you will loose everything. it had happened to me for 3 months (I had the purchased the rest 8 stocks which didn’t move and for some reasons I couldn’t buy the 2 stocks which moved) and now stopped following this system.
I see a flaw in the selection logic; where the stock is at the verge of trend change; this will say strong trend. if you cross check out of 100; 90 did trend change.
Be careful if you don’t want to loose sleep.
- admin April 12, 2019 at 8:17 am
  
  Dear Kishan,
  
  You have raised some interesting issues. These will be addressed in a post most likely this Sunday or latest by Monday.
  
  Cheers.
- Raveendran K A April 12, 2019 at 8:41 am
  
  I agree with Kishan. The selection criteria is somewhat flawed. I’ll write about it in detail later .
  - admin April 12, 2019 at 9:07 am
    
    Dear Raveendran,
    
    Finding flaws is easiest thing in the world. That is what we do all the time. Forget the big profit in September. Such things are one off and luck also plays a role at such times.
    
    I am just comparing the results of current bad period.
    
    Even if we add up the loss of December, February and March it comes to about Rs. 104000. Add the current month too considering the entire amount in trade as loss. That makes it a loss of Rs. 162000 in 4 loss making months. Now just add 1 profitable month of January to it and this loss gets wiped out.
    
    It is good to find faults with a method where 1 month of profit takes care of 4 losing months.
    
    Look at the results in totality, let us not pick and choose.
    
    Please suggest something which works, we know the flaws already.
    
    I will wait for your suggestions.

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April 2019 — We Buy Options — Day 10