DON’T OVERTRADE ELSE YOUR PROFIT TURNED INTO LOSSES:
VERY IMPORTANT POINTS TO BE NOTED WHILE TRADING IN OPTIONS.
1. IF YOU ARE HOLDING POSITIONAL SOME CALLS AND MKT OPEN IN YOUR FAVOUR THEN MUST BOOK PROFIT AT OPENING DEPENDS HOW PRE MARKET IS OPENING @9.08 AM.
2.AFTER MKT OPENING IF OPTION PREMIUN MOVES VERY FAST SAY CE PRICE OF ANY STRIKE MOVE FROM AFTER OPENING 20 TO 40 IN NIFTY OPTION AND 70 TO 150 POINTS IN BANK OPTION THEN MKT IS VERY BULLISH. BOOK 50% PROFIT HERE AND HOLD WITH STOP AT OPENINING LEVEL OF THAT PARTICULAR STRIKE. SAME RULES FOLLOW IN CASE OF PE TRADING.
3. IF YOU HAVE MADE HANDSOME PROFIT IN FIRST TWO/THREE TRADE THEN EXIT TRADING FOR THE DAY. OVER TRADING TURNED YOUR HANDOSME PROFIT IN LOSS.
4. HAVING PROFIT Rs.2000/5000 PER DAY WOULD NOT BE ATTRACTIVE FOR YOU BUT MONTHLY MINIMUM 40000/1 LACS IS DEFINITELY GOOD.
5. DON’T TRY TO PLAY EVERY MOVE IF YOUR TARGET ACHIEVE & MAKES HABIT TO BOOKED PROFIT AS WELL.
6. DON’T THINK, AFTER BOOKING YOUR CALL OPTIONS, MKT WILL REVERSE. SO DON’T TAKE ANY REVERSE POSITION, UNTIL MKT BREAK SUPPORT OR RESISTANCE.
7. IF TREND IS BULLISH OR BEARISH CAN BE IDENTIFY FROM OPTION PREMIUM MOVEMENT AFTER MAKT OPEN THEN BUY IN BULK LOT TILL FIRST TWO TRADES. THEN TAKE ONE OR TWO LOTS WHEN YOU RENTER AFTER TWO TRADES. TAKING BULK POSITION IN THIRD OR FOUTH TRADE YOU CAN LOSE CAPITAL FAST.
8. ALWAYS KEEP STOP LOSS IN THE SYSTEM IF YOU ARE NOT AT THE SCREEN. ALWAYS EXIT THE POSITION WHEN STOP TRIGGER. NEVER FRUSTRATED WHEN STOP LOSS HIT MORE THAN 4 TIMES ESPECIALLY IN SIDEWAYS MKT.
9. ALWAYS REENTER IF PRICE OF OPTION PRICE SUSTAIN ABOVE THAT LEVEL FOR FEW MINUTES. DON’T BUY IN SPIKE. SOME TIMES OPTION PRICE MOVES FAST AND CROSS THE LEVEL AND JUMP 20 TO 30 POINTS AND PRICE IS NOT COMING DOWN THEN IN THAT CASE YOU HAVE TO BUY QUICKLY SPECIALLY IN BANK OPTION.
10. SOME TIMES WE ADVICE TO TAKE BOTH CE AND PE AS MKT FLUCTUATE RAPIDLY. SO THAT,YOU SHOULD NOT LOOSE YOUR CAPITAL. WHEN MKT SETTLED THEN NEXT TREND WILL DECIDE TO EXIT PE OR CE.