When we look back at the week gone by it gives us mixed feelings. There were moments when we had the top of the world feeling. Just two days later, we were down in the pits thinking how hard we were hit.
Market gives and market takes away and we learn our lessons the hard way.
NIFTY moved down from 11811 level to 11552 in 5 trading days. The biggest fall came on Monday and the next 4 days was consolidation in the market terminology. On Friday, NIFTY closed almost where it was on Monday.
Friday move was like this:
A 259 points fall over the week should have been wonderful. We should be celebrating. We had the opportunities. We waited for more profit considering the trend. The trend sustained but our trades reversed. That is what I wrote about on Friday. Volatility is a great friend when it works for you. It is a killer when it goes against you.
On Wednesday, we were looking at a profit of Rs. 71000 and planned to exit some of the profits in HEROMOTOCO, MARUTI etc. on Thursday. Only 84 point up move in NIFTY put paid to our plans as these stocks along with few others just moved up and up. At the end of day we were down to just Rs. 20000 plus.
On Friday, things went from bad to worse as NIFTY stayed higher for most of the day and moved down in the end. Our positions came down further even with the negative close of NIFTY.
It is where the thought process matters. We can rue the fact that we missed out on big profit. Or we can consider the fact that we are still in profit. It is also a fact that on Thursday last ( July 04 ), we were in loss of Rs. 4000.
Market can still give us more opportunities with the same set of trades like it has done in the past. One such example was given in Friday’s post.
Repeating it here:
In September 2018, I had sold IBULHSGFIN PUT 1160 for Rs. 230 after having bought it for Rs. 13.50 few days earlier.
But was it a smooth ride. Not at all.
After buying the PUT for Rs. 13.50 on Sep 06, I saw it move up to Rs. 54.15 on Sep 12.
Great. Similar to some of our trades this month.
Next day it went down to Rs. 9.30.
From a 4x trade to a loser next day.
Again, similar to some of our trades this month.
On September 21, it opened at Rs. 6.05 and made a high of Rs. 353. I put in a SELL order at Rs. 400 which was not executed ans saw it end up at Rs. 102 for the day.
Sold for Rs. 230.00 on Sep 25.
Market can punish us or reward us any time. For this week, the market has chosen not to give us the profit in PUTS even when the NIFTY has gone down. Let us accept the fact gracefully and keep doing what we do. The same market has given us wonderful returns all through 15 months in PUT trades while NIFTY has been going up.
Market is not a one day match. It is a marathon, a long haul and we have to keep the belief that finally we shall come out on top.
The week which did nothing for us is gone. Let us forget that and focus on what lies ahead of us.
Enjoy the Sunday.
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.
Bharadwaj July 14, 2019 at 10:36 am
The way you present the markets to us is so motivating that I have learned so much from your words, I learned so much about trading disciple, integrity in trading and the most important of all, letting the markets to award us rightfully and nobody is greater than the markets, the way you write and motivate us about markets is the main essence of this blog, I am a commodities trader but from this month I started following your options strategy and took trades according to you suggestions and this month I exited some trades early and now I am sitting on a profit of 43 thousand rupees, I have allocated a fixed capital of 2.5 lakhs for this strategy of trading, Thank you so much for your words of Wisdom and showing us the path in this place of uncertainty filled with greed where most people fail to make profits.Reply
SRINIVASU DADI July 14, 2019 at 2:36 pm
Very nicely written Sir. Your words are inspiration for me. Your trading skills are just awesome.Reply
Vishal Agarwal July 14, 2019 at 6:56 pm
Thanks for constant motivation SirReply
Amit July 15, 2019 at 7:11 am
With due respect, the ibulhsgfin in September 2018 was a one off case, nifty was also hammered in that month, expecting all others to behave the same in every market condition may not be good strategy i think. But thanks for sharing the incident. Cheers.Reply
admin July 15, 2019 at 8:15 am
The point I tried to make was that we never know what lies ahead. It may be better than what we see at present.
I had the opportunity to exit at Rs. 52 which was almost 4 times my buying price. From there it went down to Rs. 6.20 and then to 353.
A trade goes wrong does not mean that it can not become right again. Of course, it does not happen very often.