NIFTY was up 177 points yesterday. BANKNIFTY outshone the benchmark index and went better, up 3.26% ( 683 points ).

Both these gains were enough to cause a big hole in our strategy. It is easy to think of a likely loss in a strategy. It is not easy to actually go through the process of that loss. Real trading is at times painful. Back testing and paper trading never prepare us for this pain.

For all our trouble, we landed up in this mess:

The indices are already out of our comfort zone and unless there is a complete reversal we do not stand a chance.

If NIFTY goes above 11250, we get out. For BANKNIFTY the limit is 21750.

In fact, we should have been out already. Not having done that we have to give ourselves some playing room.

Let us see how the day works out.

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.