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Option TradingTo read an option chain, you can look for the following information: Strike price: The price at which the stock is bought if the option is exercised Premium: The price of the options contract, or the upfront fee paid by the investor Expiry dates: The dates on which the option expires, which can affect the premium Open interest (OI): The total number of outstanding option contracts that have not been settled Implied volatility (IV): A percentage that indicates the expected price fluctuations, and the level of uncertainty or risk in the market Bid: The best available price at which the option can be sold Ask: The best available price at which the option can be purchased Volume: The number of transactions that have occurred on the current trading day Net change: The net change of LTP, where a positive change indicates a rise in price and an unfavorable change indicates a decrease in price Bid qty: The number of buy orders for a specific strike price Ask qty: The number of open sell orders for a specific strike price Here are some other tips for reading an option chain: The option chain is divided into two sections, calls and puts, with calls on the left and puts on the right The current market price is displayed in the center ITM call options are usually highlighted in yellow Higher open interest usually indicates higher liquidity and market activity
NSE:BANKNIFTYEducation
by SkyTradingZone
Top 1% Trader SecretDetermine your risk capital, i.e., the total amount of money you're willing to risk in your trading. This should be money that you can afford to lose without it affecting your lifestyle. Calculate 1% of your risk capital. This is the maximum amount you're allowed to risk on any single trade. For day traders and swing traders, the 1% risk rule means you use as much capital as required to initiate a trade, but your stop loss placement protects you from losing more than 1% of your account if the trade goes against you.
NSE:BANKNIFTYEducation
by SkyTradingZone
2
Option chain and Database Trading Nature of analysis. Option chain: An option chain primarily focuses on options contracts associated with an underlying asset, such as stocks, commodities, or indices. It provides information about the available options, their strike prices, expiration dates, bid-ask prices, and other contract-specific data. An option chain, also known as option matrix, is a list of all the option contracts available for a given security. It shows all listed puts, calls, expiry dates, strike prices, and volume and pricing information for a single underlying asset and within a given maturity period.
NSE:BANKNIFTYEducation
by SkyTradingZone
1
Institutional Database Trading #OptionTrading Option chain data is the complete picture pertaining to option strikes of a particular stock or index in a single frame. In the Option chain frame, the strike price is at the centre and all data pertaining to calls and puts on the same strike are presented next to each other. Options trading is a type of financial trading that allows investors to buy or sell the right to purchase or sell an underlying asset at a fixed price, at a future date. Options trading operates on the basis that the buyer has the option to exercise the contract but is not under any obligation to do so.
NSE:BANKNIFTYEducation
by SkyTradingZone
3
What is Rsi Indicator What Is the Relative Strength Index (RSI)? The relative strength index (RSI) is a momentum indicator used in technical analysis. RSI measures the speed and magnitude of a security's recent price changes to detect overvalued or undervalued conditions in the price of that security. The RSI is displayed as an oscillator (a line graph) on a scale of zero to 100. The indicator was developed by J. Welles Wilder Jr. and introduced in his seminal 1978 book, New Concepts in Technical Trading Systems. In addition to identifying overbought and oversold securities, the RSI can also indicate securities that may be primed for a trend reversal or a corrective pullback in price. It can signal when to buy and sell. Traditionally, an RSI reading of 70 or above indicates an overbought condition. A reading of 30 or below indicates an oversold condition.
NSE:BANKNIFTYEducation
by EmpireCrown
Banknifty Professional Trading Setup Here are some things to know about the MACD histogram and divergences: Divergence A divergence occurs when the price action and momentum are not acting together. For example, if the price is making lower highs, but the histogram is making higher lows, this is a divergence. Types of divergences There are two types of divergences: peak-trough and slant. Bullish divergence A bullish divergence occurs when the MACD forms two rising lows that correspond to two falling lows in the price. Bearish divergence A bearish divergence occurs when the MACD forms two falling highs that correspond to two rising highs in the price. Histogram bars The length of the histogram bars indicate the relationship between the two moving averages. When the moving averages are moving away from each other, the bars are longer, and when they are getting closer, the bars are shorter. MACD The MACD is a momentum indicator that shows the relationship between two moving averages of prices. It's calculated by taking the difference between a 26-day and 12-day exponential moving average.
NSE:BANKNIFTYEducation
by SkyTradingZone
1
How to Draw Support and Resistance Like a Pro! Support and Resistance are one of the most important aspects of technical analysis but often I see traders doing it wrongly. How to Draw Support and Resistance: Imagine you have a chart filled with SR like the one below. Do you know which levels to pay attention to? When you’re about to start, how to plot support and resistance lines? It’s filled with nothing but lines and it doesn’t seem to make much meaning of the chart at all. nah My approach to drawing Support and Resistance uses either 1 line or 2 lines. It is much cleaner and immediately tells you which area of the chart to pay attention to. I use a single line when price respect a level almost to the pip and i use 2 lines when price bounces off an area. I highlight only the key Support and Resistance of a chart meaning the obvious swing highs and lows. The intermediate SR i will not draw any lines so as to maintain my focus on the key areas. Besides, with enough screen time you can easily identify those intermediate Support and Resistance without any lines. real world… You must keep in mind of the R.S.M. formula. These three things stands for: Reaction Setup Management Now take notes because this is important… Reaction Here’s the truth: Drawing support and resistance lines aren’t the holy grail.
NSE:BANKNIFTYEducation
by EmpireCrown
Banknifty , Crude oil and Copper Divergence Divergence is a technical analysis concept that occurs when the price of an asset and a technical indicator move in opposite directions. It's a sign that the price of an asset may be reversing, and it can help traders recognize and react to price changes. Here are some things to know about divergence: #Types of divergence There are two types of divergence: negative and positive. Negative divergence happens when the price of a security is rising, but an indicator is falling. Positive divergence happens when the price of a security is falling, but an indicator is rising. #When to use divergence Divergence can help traders make decisions like tightening stop-loss or taking a profit. #How to confirm reversals Divergence can occur over a long period of time, so traders can use other tools like trendlines and support and resistance levels to confirm reversals. #When to use convergence Convergence is when the price of an asset, indicator, or index moves in the same direction as a related asset, indicator, or index
NSE:BANKNIFTYEducation
by SkyTradingZone
3
Life of a Trader / Option's // StocksEmotional reactions Overcoming your emotions is another hurdle you may encounter as a new trader. You may make impulsive decisions out of greed, fear, anger, frustration, or excessive optimism. This can lead to losses, which in turn can reduce your confidence. To ensure you don't fall into the trap of your emotions, chalk out a detailed and rule-based strategy and try to follow it strictly. Review your trades regularly to learn from your mistakes and build stable trading behaviour. You can keep a trading journal and implement stop-loss orders to reduce emotional influence on your trading decisions. Overtrading Another common challenge that can come your way is the temptation to overtrade. You may feel tempted to overtrade to earn higher earnings or overcome losses quickly. However, more trades don’t necessarily translate into more money. Overtrading can increase your risk exposure and increase transaction costs. To overcome the temptation to overtrading, you can set predefined limits on daily or weekly trades and take a break when you reach the limit. You must also ensure that you engage in trades that align with your strategy and do not prioritise quantity over quality. Impatience As a new trader, you may lack the patience to stick to your trading strategy, especially during market fluctuations. You may opt for premature exits if gains don't materialise as quickly as expected. However, success in trading does not come overnight. You must wait for the right opportunities and patiently endure losses and phases of stagnation. A solution to this problem is to have a solid trading strategy with clear entry and exit criteria. Have faith in your plan and give it the time to work. Avoid changing your strategy too often. Once you have a solid strategy, be patient, wait for the right time and grab your opportunity. Poor risk management The stock market is highly volatile and unpredictable. One day, a stock can rise by 20% and plummet suddenly the following day. Such frequent changes in the price of an asset can overwhelm you. It also makes it challenging to plan your strategy and manage risks. You may feel tempted to chase high returns and take excessive risks. However, this can wipe out your capital in no time. This is why risk management is important in trading. Make sure your trades align not only with your strategy but also your risk profile. Before placing a trade, analyse your risk-per-trade and reward-to-risk ratio. Diversify investments to spread risks across different sectors and assets to protect your capital. Include clear entry and exit points and an emergency way in your strategy. Using stop-loss orders can also help tackle risks and minimise losses. Conclusion The stock market is both alluring and daunting. Without proper knowledge and skills, you may incur losses and even quit prematurely if things don't go as expected. However, understanding the challenges beginners often face and learning to overcome them can illuminate your path to success.
NSE:BANKNIFTYEducation
by EmpireCrown
Histogram(MACD) Divergence Trading Let us discuss the MACD indicator strategy and histogram. I know being a chartist you are familiar with this tool. Hence I hope this will be a revision for you. Assuming you already know this topic, you should know that MACD Histogram is derived from MACD. To me, it is the effect of MACD (cause), without which MACD Histogram would not have been born. I hope you can relate it to the previous paragraph. If not, no problem. Carry on reading. But before proceeding further I would request you to recapitulate MACD (moving average convergence divergence). Thanks for converging your thoughts with that of mine. I am glad. It will help me to explain this article without taking the additional burden. MACD Histogram Peak-Trough Divergence By now you must have understood how the histogram dances to the tunes of prices. If one looks at it closely then one can easily identify the divergences. You will notice that a peak and trough divergence is formed with two peaks or two troughs in the MACD Histogram. Usually, it can be segregated into two parts, i.e. bullish peak and trough divergence and bearish peak and trough divergence. Alright, I will explain you in short. Bullish Peak-Trough Divergence It is formed when MACD makes a lower low and on the contrary, MACD-Histogram makes a higher low. One thing you should keep in mind, i.e., well-defined troughs define the health of a bullish peak-trough divergence. bullish peak trough divergence Bearish Peak-Trough Divergence It is formed when MACD makes a higher high and on the contrary MACD Histogram makes a lower high. One thing you should keep in mind, i.e., well-defined peaks define the health of a bearish peak-trough divergence.
NSE:BANKNIFTYEducation
by SkyTradingZone
2
Advanced Divergence Trading"Welcome to SkyTradingZone " Hello Everyone 👋 Video Information - Hello , Everyone lets start the Journey of Advanced Divergence Trading In this video, we are going to look at divergence. What is divergence? Divergence is basically when the market is creating higher highs and higher lows, and the RSI is creating the opposite. (Divergence can happen in both downtrends and uptrends.) ---------------------------------------------------------------- Q What divergence does, it's basically telling you that the trend is weakening. This is in a downtrend, and the RSI, the divergence, is basically telling you that this downtrend is weakening and there could be a possible reversal soon. So normally when divergence is happening, you normally see The market creates basically a curve. ---------------------------------------------------------------- Structure is always key It doesn't matter the strategy you use, structure is always key. So what you want to see is that breaker structure to say that the trend is changing because structure changed. Note- Normal Tip From our side try to learn Liquidity and order block
NSE:BANKNIFTYEducation
by SkyTradingZone
2
Rsi and Rsi Divergence #NSEThe Relative Strength Index (RSI) is a widely used momentum oscillator in technical analysis that helps traders identify overbought or oversold conditions in a market. Here’s a brief overview: Interpretation: Overbought: An RSI above 70 suggests that the asset might be overbought and could be due for a pullback. Oversold: An RSI below 30 indicates that the asset might be oversold and could be due for a bounce. Usage: Traders often use RSI in conjunction with other indicators to confirm signals and make more informed trading decisions..
NSE:BANKNIFTYEducation
by Optionclub
ADVANCED PCR TRADING #NSE #BSE #Option'sWhat is the PCR Ratio? The PCR measures the relative trading volume of put options (bearish bets) to call options (bullish bets) in the market. It’s calculated as:PCR=Open Interest of Call Options / Open Interest of Put Options​ Interpretation: PCR > 1: Indicates bearish sentiment. More put options are being traded, suggesting traders are hedging against potential declines or speculating on downward moves. PCR < 1: Signals bullish sentiment. More call options are traded, indicating traders expect price increases or are hedging short positions. PCR = 1: Suggests a neutral sentiment where buying and selling pressures are balanced. Why PCR Matters: Sentiment Gauge: The PCR reflects market sentiment. Tracking changes helps you gauge optimism or pessimism. Contrarian Indicator: Extremely high PCR may signal excessive pessimism, potentially leading to reversals.
NSE:BANKNIFTYEducation
by Optionclub
Advanced Trading With DataBase #Nse #BseOptions Data APIs and Tools: Investopedia: Provides insights on using options data for market direction. IVolatility: Offers a deep database of options and futures prices, volatility, and analytical tools for traders and investors. Polygon: Real-time options prices, historical data, and news for major options markets. Optionistics: Offers free analysis tools, including price and volatility history, option calculators, and more. Barchart: Provides an overview of today’s options market activity and unusual options activity5.
NSE:BANKNIFTYEducation
by Optionclub
1
Trading Management and Psychology #NSE #SMCTrading psychology is different for each trader, and it is influenced by the trader's emotions and biases. The two main emotions that are likely to impact the success or failure of a trade are greed or fear. Greed is defined as the excessive desire for profits that could affect the rationality and judgment of a trader. Trading psychology is the emotional component of an investor's decision-making process, which may help explain why some decisions appear more rational than others. Trading psychology is characterized primarily by the influence of both greed and fear. Greed drives decisions that might be too risky. Here are five ways to feel more in control of your emotions while trading. Create Personal Rules. Setting your own rules to follow when you trade can help you control your emotions. ... Trade the Right Market Conditions. ... Lower Your Trade Size. ... Establish a Trading Plan and Trading Journal. ... Relax!
NSE:BANKNIFTYEducation
by Optionclub
Advanced Data Base Option's Trading #NSE #BSEInstitutional options trading refers to the buying and selling of options contracts by large entities such as banks, pension funds, hedge funds, mutual funds, and other institutional investors. These institutions accumulate funds from various investors to trade on their behalf. Options are financial derivatives that give the holder the right (but not the obligation) to buy (call option) or sell (put option) an underlying asset (such as stocks, commodities, or currencies) at a predetermined price (strike price) within a specified time frame (expiration date). Here are some key points about institutional options trading: 1.Institutional Traders vs. Retail Traders: *Institutional Traders: These traders manage accounts for institutions or groups. They trade larger volumes and have access to more exotic products, including complex options. *Retail Traders: These traders operate personal accounts and typically trade smaller sizes of assets. 2.Advantages of Institutional Trading: *Access to a wide range of financial instruments, including exotic options. *Ability to execute large trades efficiently due to their substantial funds. *Influence on market prices due to their significant trading volumes. 3.Service Providers Used by Institutional Trading Firms: * Bloomberg * Thomson Reuters * Factset * Marketwatch 4.Educational Requirements and Job Opportunities: *Becoming an institutional trader often requires a strong educational background in finance, economics, or related fields. *Job opportunities include roles in trading, risk management, and portfolio management. 5.Earnings: *Institutional traders can earn substantial salaries, but compensation varies based on experience, performance, and the institution. Remember that institutional trading strategies involve careful analysis, calculated moves, and a long-term perspective, as these traders significantly impact market dynamics.
NSE:BANKNIFTYEducation
by Optionclub
5
Data Base Trading Part - 5 #StocksAn option chain lists data on calls and puts, underlying prices, strike prices, expiration, and moneyness. Call option data is listed to the right of the table. Put option data is listed to the left of the table. Strike prices are listed on rows in the centre of the table. Avoid options with low liquidity; verify volume at specific strike prices. calls grant the right to buy, while puts grant the right to sell an asset before expiration. Utilise different strategies based on market conditions; explore various options trading approaches. A call option buyer stands to profit if the underlying asset, say a stock, rises above the strike price before expiry. A put option buyer makes a profit if the price falls below the strike price before the expiration.
NSE:BANKNIFTYEducation
by Optionclub
2
Data Base Trading Part = 4 #Institutions Options chain can be defined as the listing of all option contracts. It comes with two different sections: call and put. A call option means a contract that gives you the right but does not give you the obligation to buy an underlying asset at a particular price and within the option's expiration date. An option chain trading strategy can be formulated by seeing accumulations in OI (open interest) and volumes in various option strikes. You should note, here, that open interest implies the number that tells you how many options or futures contracts are presently outstanding/open, within the market.
NSE:BANKNIFTYEducation
by Optionclub
3
Data Base Trading Part - 3 #NSE #BSE What exactly is an Option Chain? It is the complete picture pertaining to all the option strikes of the Nifty in a single frame. Remember, just as there is an option chain for the Nifty, you have option chains for all the key indices traded in F&O and also for individual stocks where options trading is permitted. Tips for Trading in Bank Nifty Option Stay Informed About Economic Events and Market Trends. ... Use Technical Analysis to Identify Patterns and Trends. ... Develop a Trading Plan and Stick to It. ... Set Realistic Targets and Stop Losses. ... Use Options Greeks to Assess Risk and Return. Bank Nifty is considered one of the best indices for options trading due to its high liquidity, volatility, and significant price movements. These characteristics offer ample trading opportunities and the potential for substantial profits in a short time frame.
NSE:BANKNIFTYEducation
by Optionclub
Data Base Trading Part -2 #NSE #BSE #OptionchainTo study an option chain, focus on the current market price, displayed in the centre. Analyse the built-up data to understand market direction based on recent changes in open interest and price. ITM call options are typically highlighted in yellow, making it easier to distinguish them from other options. Nifty option chain is considered to be the best advance warning system of sharp moves or break outs in the index. So, if you see an aggressive increase in open interest in puts, it is most likely being led by the institutions who are selling puts and it hints at a support level below which the market is unlikely to fall. The reverse interpretation holds in case of call options OI movement. You can position your trades accordingly.
NSE:BANKNIFTYEducation
by Optionclub
Data Base Trading Part -1 #NSE #BSE #OptionchainOption chain: Option chains provide specific data related to options contracts, including strike prices, expiration dates, implied volatility, and open interest. Traders use this data to construct options strategies, manage risk, and profit from price movements in the underlying asset. An option chain has two sections: calls and puts. A call option gives the right to buy a stock while a put gives the right to sell a stock. The price of an options contract is called the premium, which is the upfront fee that an investor pays for purchasing the option. Nifty option chain is considered to be the best advance warning system of sharp moves or break outs in the index.
NSE:BANKNIFTYEducation
by Optionclub
1
The Psychology of Money--The Psychology of Money -- 1. Real wealth is the money that you don't see 2. Focus on lowering risk, not maximizing reward 3. Focus only on factors you can control 4. Compound interest x Time = wealth 5. Money doesn't get peoples' respect 6. Only take risks you can recover from 7. Never ever happened won't happen 8. Focus on your systems, not outcomes 9. Plan for when the plan goes sideways 10. Money only solves money problems 11. Your goals will not be the same forever 12. Don't take permanent decisions lightly 13. Money is just a tool, not the goal 14. Learn to say when you have "enough" 15. Talk is cheap, you are your actions 16. Decisions are never perfectly rational 17. Don't fear change. It will happen inevitably 18. Some lessons must be experienced to be understood 19. Desperate people believe whatever sounds like salvation 20. The best thing that money can buy is your freedom.
NSE:BANKNIFTYEducation
by Optionclub