Intraday Banknifty

Hi

Not sure whether it is beginners luck , but I tried few intraday buy options CE for bank nifty and selling it for 10 rupees profit immediately with 20 lots . If i try multiple times of the day, I might get good profit.

Question is, whether Intraday Banknifty is popular or risky?

Why aren’t many people doing this as you are free from holding up overnight as the position gets closed for the day.

I am aware that selling options might be risky, but buying options CE especially for banknifty is good due to their volatality. Only stressful thing is that you need to keep on watching the screen every 1 minute to sell it off immediately for a reasonable profit.

Please advise whether this is popular one or something risky so that I am aware of the risks.

Am a absolute beginner in F&O.

Regards
S

1 Like

Me too waiting for some replies. I have tried in Bank Nifty Options but mostly losses.

or at a paralyzing loss!

No individual can control the markets, no one can!


Basically your sub-conscious already knows the amount of risk you are taking! :slight_smile:

It will just take that ONE trade to wipe it out forever…

If you want to be stay in the markets for a long-haul, please do not day trade - speaking from experience, rest you’ve your free will.

Instead harness the power of compounding over long term! Yeah, I know its boring but that’s the only suggestion I have got for you.


To other fellow readers,

Feel free to troll this post as much as you want! But you cannot change the reality - its harsh and the harshness is several times magnified with maddening leverage!

2 Likes

@AmbedkarsFinger
I appreciate your intention of making the reality sink in to those who trade without realizing what they are getting into. Compounding is boring but powerful like laws of physics. Einstein called it 8th Wonder of this universe.

A trader would say, Trading is part of our lives. Even to choose long term compounding is a trade, is it not?
If you don’t trade the lemons the life gives you, then all you will have is lemon juice

@silentbull
I am glad you are making money by speculating BankNifty, and one of my close associate does it daily. I join him in the action and try to understand how they find price to enter. It is fun to be in the heat of action. Make and lose money, get stimulated by it. When one trades naked, he is trying to catch the falling knife. Whether it is good or bad, depends on his hands, and pain bearing capacity :wink:

Here is what I call the falling knife scenario that unfolds everyday. Take a look


This happened on 8th July. Bank Nifty was going happily up until 2:20PM. A trader in Long Position, would be salivating at his profits. Then entered the Bears:bear:, and wiped out all the profits in matter of 45 mins. Even 10 mins takes away lot of profits. If you have a system that kicks you out of the market at 2:25 PM, you would have survived. Else the days profit would be lost, and additional losses will incur. Leveraging makes it worse. This is what @AmbedkarsFinger is telling.

Fighting the Bears or Riding the bulls might seem stimulating. That is a just a sport, and entertainment. Not a system.

Keep in mind, we as traders are in the market to do business, to move money and make a difference in the economy. Our profits are the rewards of our work, analysis, risk mitigation and order execution efficiency. Concentrating on creating a system that has an edge, and not just random luck would help in long term.

Naked trading or speculating is done by many. In fact dealers make their living that way. It is a different perspective to look at the market. I would be around to see, how you are doing. Share us your insights and ideas, of how you safeguard your account from the risk of ruin.

4 Likes

Thank you for enlightining me. I will be more cautious and concentrate more on compounding.

I practically got learned in the hardway as well today as I had incurred lossess. Forgot the fact that we shouldn’t trade on expiry day. But luckily stop loss saved me.

2 Likes

Frequently I am loosing huge amount by not hitting my Stop Loss at Zerodha. Skipped my stop Loss figure (crossed below without hitting). What is the solution for this? @trader_dude @sekhar916 @Newbie420 @siva @rachuri1976 @ShubhS9 @leodecaps @vikram_rao @vishnux @vicky_kothari

Stoploss is just an insurance to avoid big losses. So work on your plans with discipline. The sooner you learn the lesser money you will burn.

1 Like

Place stop loss market instead stoploss limit or given more difference between trigger and limit.

What time frame are you trading on?

in any case use SL-M on smaller TF like 5min and SL on higher TF like 1hr , PROVIDED they are liquid.

Thanks fore the reply @trader_dude @siva @vicky_kothari.

  1. I am trading in 5/15 minutes time frame on BankNifty with GTT facility. On 8/7/2020, also faced huge loss because of non-hitting of Stop Loss. Couldn’t place a SL-Market due to active GTT.
  2. Thinking of switching to Forex Trading or Crude Oil. Which one is better for a swing trading?

@ShubhS9 @vishnux please comment on this.

Why are you using GTT for intraday? isn’t GTT for long term trading?

Neither. Any market has to have good volatility for swing trade. More importantly you have to be patient to catch a swing.

you can catch a swing on bank nifty / currencies or crude oil, it doesn’t matter. prerequisite is volatility. you can clearly see from price action if market is volatile or not.

on 5 min - 1. look at size of each bar. if they are big that means institutions are very active.
2. look at the size of each leg ,if they are big, then institutions are again very active.

This indicates markets are volatile and you can expect a good swing trade. This applies to any market.

Thanks dude. Your valid points noted.

  1. By using GTT, I thought of holding (Bank Nifty Options) to at-least the next day. Now, I realized my mistake.
  2. Presently, Bracket orders on “BN Options” are blocked by Zerodha. How to place a SL-M when there is an active SL?

if you going to hold till next day, how do you plan to eliminate overnight gap risk? if big gap against your trade then you are in big loss. There is no guaranteed SL here. Are you sure you want to take such a big risk?

I don’t understand.

if you going to hold till next day, how do you plan to eliminate overnight gap risk? if big gap against your trade then you are in big loss. There is no guaranteed SL here. Are you sure you want to take such a big risk?
I realized my mistake. Once the next day Gap was in my favour, so continued using GTT.

On 8/7/2020 afternoon, because of the sudden fall in “BN Options” did not hit the “SL Trigger” and so faced huge loss. Any solution for this?

BN is highly volatile. be it futures or options.

Try something that is less volatile i.e liquid nifty stock options. May be hdfcbank options, since it follows BN.

I have faced this too. A lot of times due to a sudden spike in volatility the SL doesn’t get hit and even if you have placed SL-M order it might get executed very far away from the SL. My suggestion, avoid buying Options. Trade in Futures or Short Options.
Here are my reasons why option buying is considerably riskier as compared to futures:
a) In case of profits: Option buying will give you good profits only when there is a good breakout. In gradual increase of price, the premium may not increase and in fact, decrease because Option writers jump in at any chance available.
b) In case of Loss: Option premium falls very rapidly when your trade and direction is wrong. As you must have experienced that already. The price in futures may not have fallen 10 points but a 20 points stop loss might get triggered in option buying case.
c) Bid-ask spread: Buying generally happens at a higher price if you place a market buy and similarly a sell will be at a lower price. If you wait to buy or place a lower price as limit, you might miss opportunities and similar thing occurs at the exit because the volatility gets magnified in options as compared to the underlying.

Considering so many disadvantages, it is better to avoid options for buying. The only disadvantage of futures is the huge STT cost. It can take up a huge chunk of your profits, still, it is better to pay more STT than make large losses. Also, the chances of SL not getting triggered on futures is very low as they are more liquid than options.

One Question.
Where do you guys set your stop loss? Trading system ?

Yes on Trading System. Zerodha Kite.

Good day.

Trading is MENTAL. You have to be a disciplined computer, executing what you decided for yourself before you take a position. Which includes executing the “Mental” stop losses the moment it hits it in the market. How can one do that?

Primer on Self-Worth
Starts with Accepting that if stop loss gets hit, you are not wrong. You are still the same person, and deserve the best in life. Don’t hate/ scold yourself. No point in getting angry or sad. Market is like your Boy / Girlfriend. They have their own mind so does the market, and trying to control them with your expectations is sure way to misery. Same with the Market.

Ask this, will I like myself if the stop loss gets hit? Then ask, will I be still in the Market if the stop loss gets hit? Third and finally ask whether have I backtested the pattern, and know the statistics and probability pattern?

Having a Stop loss is a discipline, like brushing our teeth in the early morning. Every activity in life must have a stop loss, not just your trade. Whether you are proposing a girl, or risking your job by taking an entrepreneurial endeavor, start a bar fight under influence or going to war. All needs stop loss. Hope you don’t stake your entire account as stop loss on a single trade.

Lesson in Probability
The above questions helps to psychologically simulate the loss that stop loss brings. You can feel it and decide whether that much loss can be bearable. Then take the position in the market, with the stop loss in your mind. When you find a pattern that seems to fit all the bullish features, market still has the last word, not you, me, exchange or the broker.

The same pattern might arise 10 times out of which 7 times it would have been bullish. That is 70% probability (which is really a competitive pattern, and imaginary) Thinking in this way, you should conclude that if you see same pattern, and if you take the position 10 times, there is 30% chance that your stop loss will be hit. That is 3 out of 10 times of trading the same pattern.

The stop loss getting hit 3 times can happen in a row, or distributed over the 10 times you are taking the position. Do you see, what I mean. You have to see, and feel the probability. Lets assume your stop loss brings 500 INR loss for one time hit. Can you see the market hitting the stop loss 3 times or more in a row, and you still liking yourself? Can you see the “Red Losses” in the position and still go on about your daily tasks? Love yourself? Be patient? Please read again and think, I learnt this hard way and started following position sizing.

I have shared about position sizing that I read, take a look at that. That idea gave me the break I really needed in the market. I am grateful to many authors, whom I may not even come in contact with.

Even if you are correct in seeing the pattern, even if your research is perfect, even if you have worked hard, your stop loss will get hit if you don’t give sufficient space for the pattern to work. If the market hits your stop loss, kill the trade, exit it mercilessly and safeguard your capital. Then feel satisfied that, you followed your system. Even though you made a loss.

Relying on stop orders the brokers provide is important when you begin trading. Use them. They are like training wheels on your bicycle. Drop them, if you want to go faster. You will have accidents, bruises, bone fractures… Hey, you want to be free right?? You wanted it… Be disciplined and you will become the champ and free… One day. We all become The Champ one day.

PS: Do you watch Holly/Bolly/Tolly/Kollywood movies or series? Where heroes/ heroines take unwarranted risks, and come out best. Nope, that would be called reckless. If your half monk, still your emotions and feelings both of which will play on your rationality. Be mindful, learn being mindful. Dump your netflix, prime or whatever and Start Reading loads of books, loads of them…

Happy Trading.

4 Likes

@Qrious_Kamal Hi, your reply is detailed and thoughtful, I really like the way you are looking at the market & how one should trade.
I am quite sure that you have read lot of material in form of books or content.
Currently I am testing my strategy and the main issues I am facing is regarding SL & Trailing my profits. Can you suggest some resources which might help me learn & tackle these challenges?

Thanks… :slight_smile: