Trade blog for 31-Aug-2021

My Another Failed Trade in BANKNIFTY(Options)

Details:

Today BANKNIFTY was almost flat. Market was very volatile. Still got some good opportunity but could not convert it to money.

Today I lost another 1000 bucks in trade. It is somewhat tiring but still have to see where I am missing out and others are catching up.

MARKET OVERALL TODAY:

Choosing the money to invest:

Tried to keep it In the money but due to less fund had to go way out of the money so that I can afford the trade.

OPTIONS:

First Lot: 22 point loss. BANKNIFTY 36500 CE

Bought at 187 and sold at 165 as it hit my SL in first minute only after buying the trade so had to exit though market went way high after my exit. But anyhow this was a bad choice as I should not have entered here.

Learning: Entering just because feeling the stock will go high. Nothing was in my head . no strategy nothing.

Second Lot: 4 point profit. BANKNIFTY 36500 CE

Again entered the market with the same CE seeing a rise in the stock, was just a little late entering and had to wait for a very long time to cut this to the chase with some 4 point for brokerage.

Entered at 224 and exit was at 228 after waiting for more than an hour. 

Learning: Have too work on my strategy, as it had just risen up and I entered so could not become the part of anymore rise.  Have to figure out a way to enter at the start of the trend.

This was the trend before the rise :

Third Lot: 38 point loss. BANKNIFTY 36300 PE

Choosing PE in this market had cost me more than anything. Bought at 221 and exited at 183. This was again entering at the peak of the green candle and exiting after 15 min of not seeing move.

Learning : Could have entered after consolidating at the peak for resistance and became the part of the fall. Figure before fall:

There was a big resistance for 10 min at the daily high probably due to profit booking and the stock fell to the days bottom level. 

Fourth Lot: 3 point profit. BANKNIFTY 36500 CE

Bought it for 171 and sold it at 174. This was also an hour long wait to get to just 3 point profit. Definitely not a good trade. Was expecting a rise after a very big fall in the price but had to wait for longer than expected. This too is not a good practice as for options buyer we should look for big candles not slow rising and falling candles due to THETA decay.

Learning: Don't go for buy after a big candle as this will rise very slowly and it will decay all the amount.

Fifth Lot: 10 point loss. BANKNIFTY 36300 PE

Bought at 183 as there has been so many rise and I was expecting stock to go down and hit some bottom, but did not get through as the stock was very volatile and it took a lot of time to reach the bottom decaying all the value. This was auto cut by angel.

Learning: Do not go for trade around 3:00 until some very certain pattern is formed.

Conclusion:

Overall loss of the day was around 1000 excluding the brokerage. Today again traded around 5 trade loosing around 250 more.

Trade rules:

We will stop trading if one of the below criteria meets:

1. Market is not performing as per my expectation in first one hour.

2. I have done two trades.

3. I have lost 500.

4. I have gained 500.

5. No treading in Sideways Market

6. Watch 5 min chart and be patient.

7. Follow treading strategy.

Learning: 

Without a strategy market is not going to give back money, even if it does it will not feel like hard work. Will feel like gambling.

Get a strategy and try not to trade tomorrow as Margin Rule is gone from tomorrow so need to look at analysis posted by Ghanshyam Tech and then decide.

Thanks :)