Two days– Three Trades– All Wrong — Nifty Up 220 points.
We get jittery.
We start having doubts.
We start thinking about changing our method and going for strategies.
We start losing the belief.
We forget that doubters never achieve anything worthwhile. We forget that the same method has worked for us for last 6 months. We forget that ups and downs are essential part of trading.
This 220 point gain is causing the concerns.
In the last two months we have seen one big up move almost every weak which fizzled out subsequently.
Did the business environment change so drastically over Saturday and Sunday that we start thinking of a turn around?
Did our banks suddenly become epitomes of good business over the weekend that people are buying the shares at 10% higher prices?
Markets can be irrational far longer than we can stay solvent.
Option Buyer has the advantage in such markets.
We can not lose more than the premium paid. We can make big money if the market obliges.
If the loss of premium is making us nervous , we are not fit to be option buyers.
Those who can’t stand the heat have no business in the kitchen.
We do not initiate new trades today and just watch as the day unfolds.
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.
venkat October 30, 2018 at 8:52 am
Well said sir..Reply
Ravi kumar October 30, 2018 at 9:31 am
We will have to stand by the method… It worked even in Bullish phase of market in May, June, July..So in a Bearish phase like we are now , the method should work… Will stay with Patience…Reply
Nilesh S October 30, 2018 at 9:49 am
Agree Pramod jiReply
KVR October 30, 2018 at 12:06 pm
Option Buying Vs. Selling
Madan Mohan October 30, 2018 at 3:52 pm
Bought Indusind Bank 1300 pe @ 33Reply
Nathan October 30, 2018 at 8:24 pm
This NOV month series is one of the lengthiest series in terms of duration for us.Reply
Still we have a long way to go.
It is too early to assume anything about the possible outcome from our trades.
If the past experience is anything to go by, we are sure that two or some times just a single day is all we may need to turn the tides in our favour.
Yes, the earlier the better. But as of now it is too early to assume anything.
Pramod ji is adding the trades in a slower phase compared to the initial months of our journey.
Higher volatility may be the reason for the same.
It is also important to remember that just a single trade may be more than enough for option buyers to become net profitable.
Let us wait with patience to see through the trades.
It is good to note that some traders are picking up trades on their own. This will boost the confidence in the long run.
Hoping for a profitable series, let us wait.
admin October 31, 2018 at 8:31 am
It has been just 3 days in the series. Any loss should cause a concern but getting so worried as to start doubting yourself will not lead us anywhere. Volatile markets teach the lesson of being patient very well. It is time we learnt and practiced it.
Anand Kumar October 30, 2018 at 11:02 pm
What is it with you and SBIN. You always seem to lose the whole premium when you buy it’s PUT. Checked all previous months.
Please let us know if you can understand why we failed everytime we did trading on it.Reply
admin October 31, 2018 at 8:29 am
Thanks for sharing. There is nothing to understand. The trade just goes wrong. It is not that the price did not come down when PUT was bought. Only it did not turn profitable.
These things happen. Some trades will go wrong more often.