Descending Triangle Breakout - Continuation Pattern - RR 1: 4.3

Nov 30, 2018

Relcapital Sell Below 221.60
Stop-loss 234
Target 168.40

Risk 5.57% & Reward 24%
RR Ratio 1: 4.30

Another Probability is, it can be turned out into triple bottoms as well but looking at the prolonged decline I personally prefer to sell descending triangle breakout rather buying triple bottoms.

Continuation Pattern

Descending Triangles
In this “flat-bottom” triangle, the bottom trendline is horizontal and the top trendline slopes downward. The pattern illustrates lows occurring at a constant price level, with highs moving constantly lower.

Dec 5, 2018

Trade active

Dec 6, 2018

Note

RelCap CMP is 210
Covered Put Strategy
Sell Reliance Capital 190 PE at 7.25 and yes Keep holding future Shorted.

Relcap stop is 12.40 rs and by selling 190 PE we are reducing our stop-loss cost by 60%. If, at the end of the Dec expiry reliance capital is above 190 then we will have 7.25 as a net gain + gains or loss from shorted future whatever it will be. Let's see.

If capital go straight to 168. The we will not make anything below 182.75 ( 190-7.25) In this strategy.
182.75 is Our Maximum Profit Limit Price.

This example is nothing but controling our greed applying Proper Risk Management.

I Hope it helps.

Dec 17, 2018

Note

Trailing Reliance Capital Stop-loss at 225 now.

Dec 27, 2018

Note

Rollover Reliance Capital to Jan Expiry Jan Fut 215.80 & Exit Dec Fut 214.70. Trailing Stop is 225.

as Capital is above 190, We Gained full Premium of 190 PE Shorted at 7.25 is now ZERO.

Even if Capital hit our Trailing Stop loss in Jan, We won't Lose anything on this Trade

Dec 31, 2018

Trade closed manually

Trailing Stop of 225 Reached.

Dec 31, 2018

Note

Reliance Capital Trailing Stop Triggered.
Entry was 221.60 Stop 225 = Loss 3.40 Rs.

But we Gained 7.25 Full Premium in December expiry by Shorting 190 Put.
So Net Gain = 7.25-3.40 = 3.85