On a mission to simplify Options Trading systematically.
Author: Definitive Guide to Advanced Options Trading
8 added to My Authors
Mar 19 • 22 tweets • 5 min read
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
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.
Mar 3 • 14 tweets • 3 min read
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/n1. 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
Oct 9, 2021 • 8 tweets • 2 min read
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
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
Oct 7, 2021 • 4 tweets • 2 min read
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.
Aug 29, 2021 • 13 tweets • 4 min read
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
Aug 27, 2021 • 6 tweets • 1 min read
When I started business I had few things clear in my mind.
1. I believe myself to be a person of Integrity and I expect same to be reciprocated. 2. Interest of clients always supersedes my own interest. 3. In business, I will have to make marketing calls eventually
...regarding product or demat account or MAS or workshop or lets say algo. Offer your services once and if people are not interested, never call them back after introduction. Interested client will automatically contact you provided you give them good services or add value...
Jul 11, 2021 • 10 tweets • 2 min read
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.
Apr 21, 2021 • 12 tweets • 4 min read
DCMP (Double Confirmed Minimum Profit) is an Intraday Scalping Technique which can be applied on Equites/Future/Commodities.
Like any strategy, the most important part of this strategy lies in Risk Management. This cannot be emphasized more. Thread coming.
Requirement of the strategy: 1. Capital Required:- ₹50,000+ 2. Risk:Reward:- 1:2/3 3. Method:- Scalping 4. Charts: Tick by Tick Line Charts 5. Discount Broker 6. Preferred Desktop App for order execution.
Apr 18, 2021 • 4 tweets • 1 min read
Will be doing a comprehensive thread on a Complete Systematic Strategy for Intraday Trading along with all the rules.
Let me know the interest with RT and Comments.
Will share the strategy on Wednesday as it is holiday. Will also collect some example chart from live market on Monday and Tuesday.
Nov 12, 2020 • 12 tweets • 6 min read
Can #Fractals be used to find the probable reversal on charts? Can it be used to find probable top and bottoms on #Stock Charts. Alone they might not. But lets dig into this possibility. I promised few days back of another model to find top and bottom. + @rohit_katwal Fractals refer to a recurring pattern that occurs amid larger more chaotic price movements. Fractals are composed of Three or more bars. The rules for identifying fractals are as follows:
Nov 7, 2020 • 12 tweets • 6 min read
Part 4: Understanding #OptionsBasic for #Nifty#BankNifty
In previous threads, we understood Intrinsic/Extrinsic value of options, how to achieve greek neutrality, risk management and how to define cheap or expensive options. Now
What Is Historical Volatility (HV)?
...1/n @rohit_katwal Historical Volatility is a statistical measure of the dispersion of returns for a given security or index over a given period of time. This measure is calculated by determining the average deviation from the average price instrument in the given time period.
Nov 5, 2020 • 4 tweets • 3 min read
Q. What is something that only someone who has been in the stock market for 10-15 years would know?
That profitability comes not from the trading system or some golden indicator or technical analysis of some kind.
#INDIAVIX is a measure of market’s expectation of volatility over the near term. VIX is computed using the order book of the underlying index options i.e #NIFTY.
@rohit_katwal VIX is denoted as an annualized percentage. Higher the VIX, higher the expected volatility.
When Nifty goes up, VIX reduces. When Nifty goes down, VIX increases. Its an inverse relationship. Why?
In my past tweets, I mentioned IV is demand and supply.
Oct 25, 2020 • 5 tweets • 3 min read
#Nifty volumes were pretty low on current futures but COI buildup is 3 lakh contracts. Consolidation underway. 78 Lakh contracts added on calls vs 44 lakh on put side. Still level 4 bullish on option chain. Given monthly expiry, one needs to be cautious. 1/n @rohit_katwal I am holding 12000 Iron Fly. Will hold it if we are sideways and by end of day will square it off. If no direction then will take directional view on Tuesday.
If we go below below spot 11908, I will exit Iron Fly and hold Bear Call Spread.
Oct 23, 2020 • 4 tweets • 1 min read
As far as charts are considered, I do not look for Volume Interpretation when we are in a sideways channel. But once we are out of channel, I do give it importance.
Reason: Any symbol follows general rule of market. Trend>Accumulation/Distribution>Trend.
Now, this may vary from time frame to time frame and may have different interpretation when combining lower and bigger time frames. Once I spot a channel, volume and its interpretation inside it is irrelevant. Only the breakout.
Oct 17, 2020 • 10 tweets • 5 min read
Part 3: Thread on #OptionBasics for #Nifty#BankNifty or #Stocks for beginners
In Part 2 we understood how to determine what IV is high and when to buy and sell options. Now we need to understand when to exit, roll or take a stop-loss.
...1/n @rohit_katwal Lets take a credit spread today:
Sell 11800 PE at 118
Buy 11700 PE at 75
Max risk is 57 point & max reward is 43 points. As visible from the Greeks, delta is almost neutralized and position is theta positive. Does one need to always look at greeks to strategize 2/n
In Part 1 we understood Intrinsic/Extrinsic Value, Theta Decay and IV.
Now we need to understand another aspect of IV. Volatility is mean reverting. It means if Volatility is high, it tends..
@rohit_katwal to decline and if Volatility is low, it tends to rise. So when deciding on Option Strategy we should consider IV. If it is low, we should buy debit spreads so that we benefit from rise in IV. If IV is high, we should sell credit spreads so that we benefit from...2/n
Oct 8, 2020 • 10 tweets • 5 min read
Q. What are some basic points that we must know before going for options trading?
Here are few pointers before you start option trading: - 1. Option Trading is a game of probabilities and money management.
...1/n @rohit_katwal 2. There is no such thing as unlimited profit and unlimited risk in option trading. Unlimited profit is same as hitting a lottery and we all know what happens to lottery buyers. There is no unlimited risk if you know what you are doing.
Oct 7, 2020 • 5 tweets • 2 min read
On 25 Sep we had first short covering on #Nifty and since then its long buildup everyday. Till now approx 34 lakh in COI Buildup. During selloff, we had long unwinding till the lowest point. Its starting to buildup again and rally can lead to 12000+ the way it is going. 1/n
On Option Chain, we are Level 4 Bullish on weekly and monthly options with bullish PCR's. if 11700 breaks we MAY get into a base formation before a next leg up till 11500 levels. Close action at previous top of 11793 is needed. 2/n
Oct 3, 2020 • 14 tweets • 8 min read
I welcome all the first time visitors to my profile. I am posting some tweets and information which you may found useful.
My name is Rohit Katwal and I am the founder of Katwal Asset Management.
Kindly Retweet so I can reach to more fellow traders and connect with them.
You can find more information about what we do on my blog cum website rohitkatwal.com
I keep my trading journal live for fellow traders to access. If some tweet about my trade is missing, it will surely be updated in my Live Journal here rohitkatwal.com/live-journal