After learning to play well with equity in various styles like scalping, intraday trading with and without heavy leverage. positional trading and swing trades, which range from low-risk low profit to high-risk high profit, i succeded managing some amount to cover my monthly expenses while also keeping my savings safe as it is. The market stabilized from the bull run and became sideways and in such case, good decisions become important as bad decisions can easily cause some money loss which is not during the case of a bull run where there is lots of freedom to make mistakes and still be in some profit (bull runs seems to be like self-healing / limiting diseases). Worst for these trading styles could be a bear (falling) market where there may be no profit and even the losses may break even with a long gap if they grow too much. There are derivatives which helps to make investments for trading in all kind of market scenarios, they are known as futures and options and they allow to make bets in both up down and range bound market to earn. Options are a very high risk money making instrument with great complexity but when utilizing its power, the real focus needs to be on a few key features like intrinsic value, delta and maybe just time decay also to some extent for practical purpose. Derivatives have more than 75% money of whole stock market of India and out of that 90% is just in the index options.
playing with derivatives, i lost 30% of capital while trying to learn, where major losses were on a single day when i made the intentional mistake of trading too aggressively with clear mind that either i will learn or leave this to may be neve do again (at least for a few years).. The day i lost 30% it was actually a 45% loss with 15% recovery, and being able to make recovery made me confident in trading with options. While option selling is the safest way and hedged option buying is some risk some profit, the option buying is the maximum and very fast profit making technique though it causes huge losses and at extreme speed.
within a week I recovered all losses and made my capital 1.5 times from what I had when started trading options.
Great success, and while options buying is said to be equivalent to gambling (can be better said as high risk high profit and uncertainty) I understood to utilize multiple factors to deal with uncertainty to some extent. What helps most in such high risk high uncertain scenarios was the real-time data, price action, and indicators. The Price action analysis is highly subjective while indicators are objective but all indicators are derived from price itself by applying some mathematical formula and all are lagging indicators compared to the price, and having this feeling and being able to profit better with price action, now my trading screen is much cleaner and not having multiple indicators anymore, just occasionally I add one or 2. This price action seems to be equivalent to the subjective and objective status of SOAP. Subjective as the overall price action now, an hour back, yesterday, this month etc.. and objective as the current real-time status, better if more complete and with more accuracy and in a form such that can be easily grasped by mind..
Another change is using different type of candles rather than the common heiken ashi candles, depending on the need of analysis. what i am using is heiken ashi sometimes and volume candle most of the time, it helps tract the real time movement with finer view of reality to understand what is happening in the market.
While trading options there are some index heavy weights too, i track them too and they are equivalent to the heavy weight objective markers that can make drastic impact on a patients health over time or suddenly eg. SpO2 in a case of covid pneumonia.
its the tape and tape reading is frequently used for trading, their won't be zeroes but real numbers of orders floating and hence the real game of supply and demand.
My trading terminal a while back with technical indicators overload and now simple but equally enjoyable ->
No comments:
Post a Comment