My previous post was written on August 20.
NIFTY had closed at 11470.75 on Friday, August 17. In next two days of trading on August 20 and 21, it is now at 11570.90. Two days, 100 points and our PUTS go down crashing. we are now staring down the barrel. CALLS too have not done wonderfully. GAIL and YESBANK came down heavily from their highs and if the NIFTY trend becomes negative, these are the stocks which may not do well.
What do we do now?
I would like to mention that this site is about learning and not about tips. We learn our lessons from such situations.
Yes, we are in a storm. We were in similar situation in June just 4 days before Expiry. Came out successful on that occasion. It is the market which does it for us. We may come out of trouble this time too or may fail. That will be a losing month for the first time in 4 months. From this we learn the lesson that we are not infallible. No one is. We learn and move on to next month with the same belief which we had at the beginning of the month.
A look at the situation:
A loss is a loss. We should not be afraid to face it.
The figures are not good and they hurt. They hurt more if you started following only from this month. Those who have taken profits in previous months can accept the loss philosophically, for the new followers it may lead to a confidence crisis.
Not learning the lessons :
Many readers have expressed concern about the losing situation. Not a single reader has posted any comment which tells me that learning is in process. When YESBANK CALL 400 went above Rs. 12.00 on Monday, how many of us got out and moved to CALL 410 or CALL 420. No one did that. That was one method of protecting your profit discussed many times earlier. Still no one followed the method. Same thing in L&T FH.
It is about learning and belief.
Let us stay with the trades with hope and expectations. We still have 6 days.
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.