Chart Patterns
PCR Trading Strategies Tips to Increase Your Profitability
✓ Trade with trend
Avoid buying OTM options randomly. Wait for momentum.
✓ Use volume profile & market structure
This helps identify breakout zones, reversal points, and premium traps.
✓ Avoid trading against volatility
Buy in low IV, sell in high IV.
✓ Don’t hold losing positions
Options decay fast → exit quickly if the market goes against you.
✓ Use hedged strategies
Spread strategies reduce risk and stabilize profits.
Divergence Secrets How Volatility Affects Profits
Volatility (VIX or IV) is another major factor.
You profit when:
IV goes up after you buy options
IV goes down after you sell options
High volatility = high premium
Low volatility = low premium
This is why buying options ahead of big events (Budget, elections, results) is riskier—IV may crash afterward.
Option Chain Analysis Time Decay (Theta): A Major Profit Source
Time decay is a predictable reduction in premium as expiry approaches.
How Theta works:
Buyers lose money daily if the price does not move.
Sellers gain money daily even if nothing happens.
Example:
Premium at start of week: ₹200
No price movement
By expiry: ₹20
Sellers keep ₹180 simply because time passed.
Part 2 Trading Master ClassHow Option Sellers Earn Profit
Option sellers (writers) make money very differently from buyers.
Sellers earn through:
Premium collection
Time decay (Theta) working in their favor
Market staying within a defined range
Selling gives higher probability of profit but unlimited risk if the market moves aggressively.
Example:
You sell Bank Nifty 49,000 CE at ₹220
Market stays sideways or falls
Premium collapses to ₹30
Your Profit = (220 – 30) × Lot Size
This profit results from the sold option expiring worthless.
Part 1 Trading Master ClassHow Put Options Generate Profit
A Put Option gives you the right to sell an asset at a fixed strike price.
You profit from a put when:
Underlying price moves below strike
Premium increases because market falls
Example:
Nifty at 22,000
You buy Put 22,000 PE for ₹100
Market falls to 21,700
Premium rises to ₹210
Your Profit = (210 – 100) × Lot Size
Put buyers make money when markets fall, similar to short selling but with limited risk.
Part 2 Support and Resistance How Call Options Generate Profit
A Call Option gives you the right—but not obligation—to buy an asset at a fixed price (strike price).
You profit from a call option when:
The market price goes above the strike price.
The premium increases due to:
Price movement
Increased volatility
Reduced time to expiry near ITM levels
Example:
Nifty trading at 22,000
You buy Call 22,000 CE at ₹120
Price moves to 22,200
Premium increases to ₹200
Your Profit = (200 – 120) × Lot Size
This profit comes without buying the actual index—just the premium appreciation.
Part 1 Support and Resistance Understanding the Foundation of Option Profits
Before diving into strategies, two basic forces determine profit in options:
A. Price Movement of the Underlying
If the underlying asset (stock, index, commodity) moves in the direction you expect, your option gains value.
Calls gain when price goes up
Puts gain when price goes down
B. Premium (Option Price)
Premium is the amount you pay (for buyers) or receive (for sellers/writers).
Profit/loss happens based on how this premium changes.
Candle PatternsHow Many Patterns Should You Learn?
There are over 60 patterns, but professional traders only use 8–10 regularly.
Most Important for Beginners
Engulfing (Bullish/Bearish)
Hammer / Shooting Star
Morning / Evening Star
Doji
Marubozu
Mastering these will give you 80% clarity.
Premium Chart Patterns Smart Money Concepts (SMC) and Premium Patterns
Premium patterns align perfectly with SMC concepts like:
Break of structure (BOS)
Change of character (CHOCH)
Fair value gaps (FVGs)
Liquidity zones
Patterns help visually identify these changes.
Lets Create and Backtest a Simple Strategy from literally ZeroI make educational content videos for swing / positional trading .
In this video I will be using 3 months old chart along with one example of how to approach any trade or price action with literally zero lines and zones on screen .
Part 12 Trading Master ClassKey Tips for Beginners
1. Start with Defined-Risk Strategies
Vertical spreads (bull call, bear put)
Covered calls
Iron condors
These limit losses and prevent account blow-ups.
2. Avoid Selling Naked Options
Beginners should fully avoid selling naked calls/puts because:
Risk can be unlimited
Sharp market movements can cause huge losses
3. Understand Option Greeks
You don’t need to master all, but focus on:
Delta → Direction strength
Theta → Time decay
Vega → Impact of volatility
4. Use Proper Position Sizing
Never use more than:
2–5% of capital on a single trade
10% total exposure to naked buying (calls/puts)
5. Back-test and Paper Trade
Before risking real money:
Test strategies on historical charts
Use virtual trading platforms
Study how premiums behave near expiry
6. Trade with Market Structure + Volume Profile
Since you’re already learning volume profile, combine it with options:
Identify liquidity zones
Sell options at premium zones
Buy options near support/resistance breaks
Part 11 Trading Master ClassIron Condor – Best for Sideways Markets
Perfect for low-volatility environments where price stays in a range.
How it works
You create:
A bull put spread (below market)
A bear call spread (above market)
You earn net premium from both sides.
When to use
Markets are consolidating.
You expect low volatility and no big moves.
Risk and reward
Risk: Limited, predefined.
Reward: Limited to net premium collected.
Example
Nifty trading at 22,000
Sell 21,800 PE – Buy 21,700 PE
Sell 22,200 CE – Buy 22,300 CE
You collect total premium and profit if Nifty stays between 21,800–22,200.
Part 10 Trade Like InstitutionsBear Put Spread – Best for Mild Downtrend with Controlled Risk
Same concept but for bearish conditions.
How it works
Buy a lower strike put.
Sell a farther out-of-the-money put.
When to use
Expect small to moderate fall.
Want low risk and fixed cost.
Risk and reward
Risk: Limited to net debit (premium).
Reward: Limited but predictable.
Example
Buy Bank Nifty 49,000 PE at ₹150
Sell 48,800 PE at ₹70
Net premium = ₹80
Max profit = 200 – 80 = ₹120
Part 9 Trading Master ClassBull Call Spread – Best for Mild Uptrend with Low Risk
This is a defined-risk bullish strategy.
How it works
Buy a lower strike call.
Sell a higher strike call to reduce cost.
When to use
You expect a moderate rise, not a major rally.
Premiums are expensive and you want to reduce cost.
Risk and reward
Risk: Limited to net premium paid.
Reward: Limited (difference between strikes – cost).
Example
Buy Nifty 22,000 CE at ₹120
Sell Nifty 22,200 CE at ₹50
Net cost = ₹70
Max profit = ₹200 – 70 = ₹130
Part 8 Trading Master ClassLong Put – Best for Bearish Markets
This is the opposite of a long call.
How it works
You buy a put option.
Profit when price drops below strike.
When to use
You expect a sharp fall.
You want a cheap hedge for your portfolio.
Risk and reward
Risk: Limited to premium paid.
Reward: Large profit as price falls.
Example
You buy 48,000 put on Bank Nifty for ₹80.
If BN falls to 47,500, the option may rise to ₹600.
Part 7 Trading Master Class Long Call – Best for Trending Bullish Markets
This is the simplest directional option trade.
How it works
You buy a call option.
Profit increases as price moves above strike + premium.
When to use
You expect a big upside in short time.
Market volativity is low, premiums are cheap.
Risk and reward
Risk: Only premium paid.
Reward: Unlimited theoretical upside.
Example
You buy a Nifty 23,000 CE for ₹50.
If Nifty goes to 23,200, your call may become ₹200.
Your profit = ₹200 – ₹50 = ₹150 per unit.
Part 6 Learn Institutional Trading Cash-Secured Put – Best for Buying Stocks at Lower Price
This is the safest way to use options when you want to accumulate stocks at a discount.
How it works
You set aside cash.
You sell a put option at a lower strike price.
If the stock falls below strike, you get the shares at a discount.
If not, you keep the premium.
When to use
You want to buy shares at cheaper levels.
You are comfortable owning the stock.
Risk and reward
Risk: You may need to buy shares if the stock falls heavily.
Reward: Limited to premium collected.
Example
Bank Nifty at 50,000
Sell 49,500 put at ₹100 premium
If Bank Nifty stays above 49,500 → you earn ₹100 × lot size.
Part 4 Learn Institutional Trading Covered Call – Best for Slow Uptrend or Range-Bound Markets
A covered call is one of the safest option strategies and perfect for long-term investors who already hold stocks.
How it works
You own shares of a stock.
You sell a call option at a higher strike price.
You earn the premium upfront.
If price stays below strike, you keep the premium + your shares.
When to use
You expect slow gains, not a big rally.
You want regular income from your holdings.
Risk and reward
Risk: Stock price can fall (same as holding shares).
Reward: Premium income + small upside until strike.
Example
You own 100 shares of TCS at ₹3,800.
You sell a ₹3,900 call for a premium of ₹20.
If the stock stays below ₹3,900, you keep ₹2,000 premium.
Part 2 Ride The Big MovesThe Role of Time Decay (Theta)
Options lose value as time passes. This is called time decay.
If you are an option buyer, time is your enemy.
If you are an option seller, time is your friend.
Near expiry, premium drops rapidly.
This is why many intraday traders take advantage of selling options during low volatility.
Part 2 Intraday Master Class Why Do People Trade Options?
1. Hedging
Investors use options to protect their portfolio.
For example, buying puts can protect your long-term stock holdings during a market crash.
2. Speculation
Traders use options to profit from short-term market move—up, down, or even sideways.
3. Income Generation
Selling options allows traders to collect premiums and generate regular income.
This includes strategies like:
Covered call writing
Cash-secured put selling
These strategies provide steady income but require higher capital and risk management.
Part 1 Intraday Master Class How Call and Put Options Work
Call Option Example
Suppose NIFTY is at 22,000.
You believe it will rise, so you buy a 22,100 call option at a premium of ₹50.
If NIFTY rises to 22,250 before expiry:
Your call becomes profitable.
Intrinsic value = 22,250 – 22,100 = 150
Profit = (150 – 50 premium) × lot size
If NIFTY stays below 22,100, your loss is limited to the premium paid.
Put Option Example
Suppose BANK NIFTY is at 47,000.
You expect the market to fall, so you buy a 46,800 put option at ₹80.
If BANK NIFTY falls to 46,400:
Intrinsic value = 46,800 – 46,400 = 400
Profit = (400 – 80 premium) × lot size
If it stays above 46,800, you lose only the premium.
This limited-risk, unlimited-reward nature makes options attractive for directional trading.
