Currently the short entry is going fine. There are bullish divergences on Daily MACD however this seems normal given the strong down trend. I am attaching the hourly and the 5Min view of the Index with my indicative POA.
A very interesting and a volatile day of trade which saw strong moves on both directions.
Till the last week of Jan I have counter trend traded with reasonable success using candlesticks, moving averages, pivots/ pattern supports (such as double bottom in this case) as references to reverse. Divergences would give the confirmation and trigger a Long Hypothesis even if the larger trend is bearish.
There is some excitement to counter trend trading and it puts discretionary trades to its max potential test - but I dont like getting excited anymore and definitely do not want to be tested any more than is necessary by the market.
As per my new trade plan I have decided not to trade counter trend and because the trend on longer time frames is Bearish I have not reversed position. No regrets. I believe I trade and sleep a lot better when I am with the trend. Also trading smaller quantities helps particularly when I feel the market could range within 1.5x its Weekly ATR and options premiums are going to get owned.
I am carrying forward one Sell of Call option @ 170 points (Strike - 7400) @ 7460 spot levels. Currently priced @ 8 points with spot @ 7108, and today booked 28 points gain from a maximum of 88 points possible. No concerns - since market did take a very strong up move and my SL was reasonably OK.
Last edited by 4Play; February 17th, 2016 at 07:28 AM.
Position Entered : Short Nifty @ 7145 @ 12:26 pm. SL 7220.
After trading options for a while I have today entered Short Position in Futures.
I started trading in Nov`15 with a capital of Rs 10,000 (approx USD 145).
The minimum capital required for margin deposit is Rs 44,000 (approx USD 650).
My current trading capital is a little over Rs 100,000 (approx USD 1500).
With the capital in place I have made the trade.
Today was a poor start at many things. I slept @ 3am consequentially woke up late - reached late to work and what is worse is ran into my Boss on the way up in the lift - bad omen.
I placed the Future order from home @ 7165 - unfortunately it was rejected and I chased it much later @ 7145 only to see it now trading @ 7170 (Lol)
Nervous, and scared - hands are cold - heart is racing and I find myself aching for a smoke.
Clearly being objective is not working out here.
The market has given a monster move up and I am caught chasing shorts - almost feels like a recipe for failure.
Lets c how the trade pans out. Attaching trade charts on hour and 15M for view.
How are futures priced? What factors premium and discount?
Pain today. Entered position using Futures chart - however the spot chart would have not given a sell signal through my system. As a result Future has closed at a marginal discount to the spot level but the spot has closed higher i.e. the spot closed 85 points plus while the Future closed 55 points plus. Date to expiry Feb 25th.
Next time will analyse spot chart and enter Future at a assumed premium/discount value. Need some advise here from senior traders who trade Futures for duration lasting a few days to weeks. Which chart do you refer too? the Futures chart or the corresponding Spot?
Certainly the first Future trade is not going too well. ATM SL is not hit, but if SL hit I will lose approx 10% of my balance.
A gap up spinning top today at a critical resistance creates pattern rich prospects. Additionally I have premised that the spot is now trading on a ascending triangle with the top @ current levels. So if this premise is correct I should not get stopped out tomorrow.
Hoping for a weak start tomorrow. This situation of hope implies that I am struggling - A little disappointed for choosing today to enter - but may be all is not lost yet.
Last edited by 4Play; February 18th, 2016 at 07:08 AM.
Reason: Added info Para 1.
Booked losses equal to approx 10% of account. This was a poorly thought of trade and therefore losses warranted. Trading like this and gambling are no different .. Pathetic and feel sorry for my stupidity.. Slight tilt after booking this - the market behaved as expected my position was totally out of sorts and not warranted.
As a rule no further trading for this expiry.
Will upload chart tomorrow - due to issues with the Internet here and some site specific problems not being able to upload.
Will study commodity and currency charts over the weekend..
Will look to trading these securities in about 7-10 days which will be my first ever trade on these securities. My first ever future transaction just sucked.
Anyways happy that the weekend is here...
Best of luck to all and have a great weekend.