First FnO trade

Dear all… since 2 yrs i am trading, i went thru all the hurdles as many traders have gone… now i have a neat stratergy to escape from big losses… if i have learnt something, it is all by market nd trading discussions… plz guide me to trade in fno, after reading many articles i have come across people stating fno is dangerous… sir i want to know how to execute nd exit fno trades…

It is not dangerous, but needs the analytical skills to process many datapoints at the same time. Not many traders are made for this. Better to stick with equity trading.

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Godha if you have been trading for 2 years this is a good time to start. FnO itself has many styles and stratergies and you have to hit and try to choose what suits you popularly you can :

  1. Buy/Sell futures.
  2. Buy/Sell options.
  3. Buy/Sell strategies (multi-leg options )

The cheapest and the most popular one is to buy naked options i.e. buy a Call or a Put but it requires a lot of experience to master.

Check sensibull, it has many videos on how to trade options and go through easy options column for beginners.

Tq zutshi nd prakash… i want to share that i took my first trade in futures nd exited with profit…

Tq siva

Derivatives, more commonly known as, FnO (Future and Options) are considered as very risky, simply because of the leverage given.

Leverage is a double edged sword. If used, conservatively, the rewards are awesome, but if used, aggressively it can ruin the account, even if you have a very good strategy. Generally leverage of around 2 or 3 is considered is decent.

My leverage varies from trade to trade, simply because I position size. I make sure that loss per trade is never more than 2% or 3% of my trading capital (I use 2 trading systems - one has 2% rule and the other 3% rule). I find this more effective than limiting to a pre specified leverage.

Try backtesting using position sizing, you will notice the beauty. Make sure you backtest atleast few years.

I’m posting my trades on twitter on EOD basis. If interested, please follow my tweets. My Twitter handle is @AnanthaRaman19

Tq fot reply… i will follow…

Can you explain your strategy about avoiding big losses if you don’t mind ?

@Godha_Kirana For F&O trading you need to have both theory and practical knowledge

For theory knowledge you can refer FO modules of Varsity by Zerodha , the book called “UNDERSTANDING OPTIONS 2E” available online and for practical knowledge you have to check and analyse various data points like option chain,fii buying and selling, open interst in futures etc…

and loads of capital.

When I opened my demat account I never the equity was the only segment enabled. I hated fno for the risk and its complexity to understand option.

I have gone through all the zerodha varisty regarding fno and then I started with small quantity and multiple breaks when I was not confident and did paper trading.

To keep it simple.

  • Learn everthing about futures and options from varsity and do watch sensibull videos.
  • Do paper trading, you can use for paper trading.
  • Know Margin requirements (capital requirements).
  • Start with small Quantity.
  • Don’t trade if your not confident.
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@Morpheus it can be done even with 200 400 600

Tq for reply… i ll follow…

Really helpful . I was looking for good paper trading softwares before starting out with my FnO trades .

Thanks for the info Brother and Good luck with your trades :slight_smile:

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Quite right, but we are talking about trading 5-10 years maximum and making a comfortable exit from this stressful profession with sufficient savings for retirement.

With the 200 400 600 you mentioned, someone has to keep reading charts and looking at indicators through your 50’s 60’s and possibly 70’s and still not able to make a retirement.

Sensibull has paper trading feature for options, you can give it a try.

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