Going forward, I am extremely cautious on BANKNIFTY.

I really was rooting for BANKNFITY to be bullish in coming days. Break of 39700 will take BANKNIFTY towards 37500 levels.

This is 1 Month Chart of BANKNIFTY. Break of 39700 (Support) will push prices further down. On Daily Charts, we are standing at a support and gave a dead cat bounce. COI did not recede from this point but as you can see there has been continuous selling. At support, either this gives a bounce or indicative of incoming sell off.

Attack on Police Station by mob has me worried since last few day. Morning I read the news of attack on #Punjab Police by extremists.
timesofindia.indiatimes.com/city/chandigar…

Do watch.

And yes, I am rightly worried. Its a neighbouring state. This has been happening for past few months now. My immediate question was, what is the central government doing? I have no expectations from AAP. Or uprising of people of Punjab against such elements, as people themselves chose AAP. Many I talked with are regretting it now.

William's Alligator is probably the most underrated indicator in moving average category.

Alligator follows the premise that market is sideways for 70% of the time and trending only 30% of the time.

This is where William's Alligator can be a great tool for traders. Why William's Alligator can be a great tool for traders?

It can identify Bullish, Bearish and Sideways market pretty easily. Problem is, traders don't know how to use it effectively. Alligator has three lines:

1. Lips - Fastest Line
2. Teeth
3. Jaws - Slowest Line

I have no sympathies for #Scammers who were duping people with lakhs and crores of screenshots.

At first, I along with friends of mine were in awe of how they were generating this much return. For almost, 2 years I worked a lot and tried to break the code.

Do read and retweet. A lot of ideas were worked upon on Amibroker may it be ITM Selling of Option, Option Doublers in 2 - 3 days, Intraday Option Buying, Future Holygrail and what not. In the process we were able to make Option Chain on Amibroker, calculate option greeks on Amibroker and what not.

When price is at all-time-high, retailers want to sell. When price is at all-time -ow, retailers want to buy.

This is where they fall into a trap.

"Upar chala gaya hai aur kitna upar jayega"
"Niche gir gaya hai aur kitna girega"

Do yourself a favour and follow these steps...+ Put an Alligator on at least 1HR time Frame. If

1. Low of Candle is above Alligator Lips, price is bullish
2. High of Candle is below Alligator Highs, price is bearish

Check example of HUL and BANDHANBNK...+

Thread on #OptionBasics for #Nifty #BankNifty or #Stocks for beginners

To understand options, three concepts are required:
1. Intrinsic / Extrinsic value
2. Time / Theta Decay
3. Implied Volatility

Option Value = Intrinsic + Extrinsic (Value) Intrinsic Value - Value of Option if it were exercised today at CMP.
Extrinsic Value - Total Value of time in the option.

ATM and OTM options are 100% extrinsic value. ITM options have more intrinsic and less extrinsic value.

Best way to use #RSI for Trading

What is RSI indicator?
RSI is used on price to identify oversold and overbought market conditions. In relative terms, when RSI line touches the 30 line, price is said to be oversold. When RSI touches the 70 line, price is said to be overbought. Problem of using RSI traditionally is that in heavily trending market #RSI can remain oversold and overbought for a considerably long duration. Consider example of #TATACHEM for example. If you keep selling because of RSI Oversold, you can continue to make losses.

If you hate your job, I won't advise you to start full time trading. Better yet, dont do it with loan money.

But thats exactly what I did. Not many know this.

I left my job. Arranged for funds in notice period. Took a loan to trade. Traded and made profits after all expenses..+ Everybody advises to have 2 years salary buffer before you start. I had none. 0.

Whatever loan I picked for trading, I had 4 times bigger in default. Luckily had some land, portion of which I decided to dispose and sell to cut off debt. Land does not sell easily in distress.

William's Alligator is probably the most underrated indicator in moving average category.

Alligator follows the premise that market is sideways for 70% of the time and trending only 30% of the time.

This is where William's Alligator can be a great tool for traders.

Thread 🧵 Why William's Alligator can be a great tool for traders?

It can identify Bullish, Bearish and Sideways market pretty easily. Problem is, traders don't know how to use it effectively. Alligator has three lines:

1. Lips - Fastest Line
2. Teeth
3. Jaws - Slowest Line

One of the least talked topics in stock market is Winning Probability, Risk Management and Position Sizing.

Holy grail does exist but it's not a strategy. Its mindset. Ever wondered why top traders despite different trading styles average between 4-8% returns pm?

A Thread 🧵 Key to good trading is understanding your:
1. Winning Probability - How many trades you win out of 100?
2. Risk Management - How much you lose vs how much you win. Risk:Reward?
3. Position Sizing - How much quantity you execute which impacts your loss / profit?

How can you effectively do the "Covered Calls" ?

Here is a quick guide to help you. Don't worry if you dont have the 100% capital for covered call. I will show that covered call can be done with 60-70% capital also.

Here are my inputs. What is a Covered Call ?

Selling OTM Call when you have the underlying in your stock holding.

If stock remains sideways, you earn rental income.

If stock appreciates above strike price, profit is capped.

Its the safest strategy for investors.

My Learnings from #OptionTrading this week....

1. Have a clear trading plan before you start your day
-- Support and Resistance
-- Trap Zones
-- Indicators on Multi TF analysis
-- Clear Bear/Bull Zone
-- Path of Least Resistance

Then decide where/which options to sell.

...1/n 2. Traditional technical analysis may fail. Consolidation > Breakout > Consolidation may not work always. New trend is V-up, /\-down trends, fake breakouts and fake selloffs. Be prepared for all these when creating a position. Any Option Position can be challenged...2/n

Thread on understanding OI Sparkline and how it can be used for Intraday Trading.

Market is all about trend. Trend is identifiable or visible on Open Interest also if one can track it. This trend is present in Change of OI with respect to OI on previous day.

1/n Consider this Option Chain on Intraday time frame for example.
Strike 16000 CE, 13 Apr 2022
Total OI is - 62029
Change in OI is - 22439

What this tells us is: 22,439 contracts were added today. This is Intraday Buildup. 66,684 added to 16000 PE, Intraday. 2/n

A thread on Options based on my understanding...

1. Chose the Options your sell wisely. OTM's witness theta decay very fast and will be forgiving in slight adverse move. ITM/ATM are for momentum play and best to trade with proper SL and position sizing. If you intend to trade options like stock with technical analysis with SL, probabilities and position sizing, its best to trade in ITM/ATM options.

If your intention is to benefit from massive theta decay fast with slight safety from spikes then OTM options with hedge are best.

The most underrated part of trading is Probabilities, Risk Management and Position Sizing. New traders are looking for Holy Grail Strategy.

When a new trader enters the market, First, he is always underfunded with no understanding of System.

A Detailed V. Important Thread 1/n ...Second, his expectations of returns from the market are unrealistic. I cannot remember how many instances I have had of chatting with traders wanting to double there money in a month or expecting a 100% return in an year or expecting a 20% return over a trade....2/n

Many people want to jump in to trading. Post 2021 was one kind of a market where #BuyTheDip was the basic theme of the market. That for sure is not working now when markets are tanking.

That is why in absolute basic, "Understanding Price Action" is must for traders. A Thread... Price Action Trading is representation of Price in the forms of charts taking in values - Open, High, Low, Close referred to as OHLC Values in Candle or Bar Form. To gauge whether the price is going up or down, we plot the price wrt to time on x--y axis. For eg. #Reliance +

Salaried/Employed folks wish to start their own business. Lure of working for self, sky is the limit for growth, freedom of time etc etc makes it look lucrative. Being in business, this is what I have learnt over few years. Hope you can learn something from my experience. 1/n 1. Early 20's are good for you to explore, make mistakes, find your passion. But too many mistakes can soon take you to early 30's without any growth. Learn from experience of others and figure out what you want as early as you can. 2/n

Over Trading...?

Recently had a discussion wherein trader was facing the problem of Over Trading. A Thread...

Over Trading is when:
1. Trading out of boredom, excitement, or revenge
2. Trading with fear of loss or greed over profit.
3. Trading without a plan

1/n What is the root cause of Over Trading? In my opinion, the root cause is
1. Trading being the primary source of income.
2. Trading without a proper strategy and homework.
3. Greed for more profits.
4. Problem locking in profits leading to a minor loss and revenge trading. 2/n

The next 2 days i.e. Friday and Monday are going to be tough decision making on #BANKNIFTY.

We are brushing at an all-time high and forming a narrow triangle. COI going down can go for short covering at high to force sellers to liquidate and go higher. Or long buildup might.. start with a fresh breakout. Whatever happens, Monday will be a gamble as far as positional trading is concerned. The way Wednesday sell-off was negated today, I am expecting a range from 37500 to 3900 for the 2nd week of October.

Thread on Options in Low Vix High Vol. Environment

At times when Vix is ultra low, premiums are less. As a seller it gets difficult to sell less premiums. If there is a fake move against your direction, it hits the stoploss or forces you to liquidate the position 1/n only to see market going in your direction. Being a Positional Option Strategist on weekly option then becomes a challenge. How I am coping up with this change....? A thread...

I do not sell cheap options even if its positional 2/n

In Paytm Spaces, following points came up for discussion. Here are my two cents on questions for budding traders.

Basic questions asked were about the trading journey. Most of my followers know how I started. Blew up, did a job, resigned, started and now surviving 1/n Do's for Beginners
1. Start with small capital and try to constantly increase it organically. Like start with 10% of what you can afford to lose. If you are consistently profitable then increase slowly.
2. Start thinking in % gain / loss terms from start.

2/n