ScorpioManoj Profile picture
Jun 12, 2021 4 tweets 1 min read Read on X
#FreeTip
The math to do before entering trading:
1) Capital Rs 10 lacs
2) Risk per stock as a % of capital :1.25%, ie Rs 12.5k
3) Per stock max allocation: 12.5%, ie Rs 1.25L
4) Risk per stock as a % of position: Max 8%-10%, ie 12.5k
5) RR - 10%:20% , 1:2 , 12.5k : 25k
...
...
6) No. of trades likely during the year : 100
7) Win % : 40%, ie 40 trades
8) Projected End capital : 10L x (1+0.20)^(40) x (1-0.10)^(60) = 26 lacs, ie 164% return
It doesn’t mean that u will necessarily reach the end capital ; U will know if your activity ...
...
during trading is statistically feasible. For Eg, during trading u observe that u are getting 1:1.5 RR and not 1:2, then , the above calc leads to -52%; U get to know your activity is economically not feasible. For Eg, u observe after a few trades that your win % is ...
....
30% and not 40% as originally planned. All else equal this will lead to -57% return; So u can think of adjusting other variables, ie, RR. By changing RR from 1:2 to 1:2.5, return goes to 45%; This gives u an idea of wat type of trades to look.
This calc is very important.

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More from @scorpiomanojFRM

May 15, 2022
#Freetip
How to find market tops or bottoms ?
Tools used by stalwarts like Stan Weinstein, Mark Minnervini, William O Neil, etc.
No. of stocks above 30 week MA (MAMB)
Steps :
1) Watch for Price making HH, but MAMB makes lower low; suggests top is near. Might take several weeks
...
In our N500 chart, it started from 16/07/2021 and made HH on 29/10/2021. (14 weeks)
2) Look for a bearish price action in weekly chart, like bearish engulfing, bearish pinbar, etc. This more or less confirms the top specifically. (29/10/21)
...
...
3) To be more specific, watch out for the first lower high in weekly chart. This confirms the top. (18/11/21).
(4th week after step 2).
THIS IS WHEN MARK MINNERVINI GAVE A SELL CALL ON S&P WHEN THE WHOLE WORLD WAS BUYING .
5) Market tried to make a HH with ....
Read 7 tweets
Dec 28, 2021
#FFF
Old examples of FFF pattern at THAT POINT OF TIME (not handpicked now).
Look for similar patterns among microcap/small/midcap in that order for identifying multibaggers....
Spend lots of time during weekends looking for these patterns in HTF ... weekly/monthly. Good luck
Read 4 tweets
Jul 18, 2021
#FreeTip
High probability strategy
Charges : Nil.
Name : MTF Inside bar (MInBar)
Everything right from the tool is provided here. All u need is to do a bit of home work and execute...
1) Scan for stocks with inside bar in 2 HTF, say monthly chart and weekly chart.
....
2) Mark the high of the inside bar with a horizontal line.
3) Come to weekly chart. The monthly markings should be intact.
4)U will find an inside weekly bar as well. Mark the high of the inside weekly bar.
5) Now u have to go long when price goes above the high of ....
....
this weekly bar or the high of the monthly inside bar whichever is higher.
6) U can go to the daily chart / 75 min chart for fine tuning your entry.
7) Keep stop of 8% in system, this is important . Exit without any questions even if the stock is of the highest quality.
..
Read 7 tweets
Jul 16, 2021
#Knowledge
#Options
Ever wondered y gamma is the enemy of straddle / strangle sellers and what it means?

Presume readers are aware of option Greeks meaning...

To understand , first ...

Relationship between delta, gamma, theta and option premium.
....
....

Theta + (int Rate x Underlying price x Delta) + ( 0.5 x variance of underlying x Underlying price x Underlying Price x Gamma ) = Int rate x Option premium.

Strangle and straddles are delta neutral setup;For a delta neutral setup, the second term becomes zero; Hence,
...
....

Theta +
(0.5 x variance of UL x UL price x Underlying price x Gamma)
= Int rate x option premium

Straddle and strangles have typically zero delta at initiation; they also have positive theta, meaning they gain over time assuming other components of option r constant ..
Read 4 tweets
Jun 18, 2021
#Reality
Step 1) Buy 500 stock A for intraday at 200 with stop of 197.
2) Stock moves to 205 slowly after an hour and u think ur entry is great and begin taking mtm screenshots to send to your friends.
3) Then comes a big red candle straight to 200. U assume it as retracement.
.
...
4) After few minutes of hovering near your cost, it begins to fall to 198.
5) U start becoming jittery. Ur mind which was tuned to only accept profits after watching mtm in point 2, is unable to accept loss. So u move your stop to 195.
6) Stock drops to 196....
...
7) U think this is a retracement and add another 200 at 196.
8) Stock moves to 199 slowly. U feel elated and hope that it will further move up.
9) Another red candle, stock drops to 196. U start feeling nervous.
10) U remove the stop thinking that it might hit...
Read 7 tweets
Jun 16, 2021
#FreeTip
Basic rule for day trading in option buying for beginners.
1) Stick to monthly atm options.
2) Suppose u have a capital of Rs 5 lacs. Your max risk appetite is 1% which is 5k. Assume u look at BNF chart and find a buy setup at 35000 ...
...
with a stop of 34900 ( 100 point difference). This essentially means that the 35000 atm options will have a stop of Rs 200 ( delta 0.5) assuming all other things are equal. So the number of lots U should typically deal with based on 1% Risk on 5 lacs capital ...
....
is 5000 / 200, which is 25 , ie 1 lot. If your risk appetite is 2%, then u are allowed to take 50, ie 2 lots. Hence if option price is say, Rs 400, ur stop will be 200 and u have to deal with one lot which means your deployment is 25 x 400 = Rs 10,000....
Read 5 tweets

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