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Risk Management

Mastering the Intraday Sutra: An intraday trading strategyMastering the Intraday Sutra: A Professional Guide to Trading Indian Markets with Precision (Adapting Globex Strategy-Inspired Concepts to India’s Unique Trading Hours) Introduction The Intraday Sutra strategy is a systematic approach designed for India’s equity/futures markets, inspired by the principles of identifying key price levels (similar to the Globex "high/low" concept) but tailored to India’s fixed trading hours (9:15 AM – 3:30 PM). This strategy leverages prior-day price action, supply-demand zones, and disciplined risk management to capitalize on intraday opportunities. Below, we break down its components for clarity and repeatability. Strategy Overview 1. Core Instruments Indices: All indices Stocks: Nifty 50 constituents for alignment with index momentum 2. Ideal Time Frames 5-minute charts: For granular entry/exit precision. 15-minute charts: To filter noise and align with broader intraday trends. Key Levels: Prior-Day High/Low & Supply-Demand Zones 1. Plotting Prior-Day High (PDH) and Prior-Day Low (PDL) Purpose: These levels act as psychological benchmarks. Method: - Manually mark PDH/PDL on your chart. - Use Trading View indicators (e.g., “Previous Day High-Low”) for automation. 2. Identifying Supply-Demand Zones -Supply Zone: - Formation: Rally → Base → Drop (RBD) or Drop → Base → Drop (DBD). - Action: Potential sell zone; price often reverses downward here. - Demand Zone: - Formation: Drop → Base → Rally (DBR) or Rally → Base → Rally (RBR). - Action: Potential buy zone; price often reverses upward here. Zone Validation Rules: 1. Structure: The “base” (consolidation) must be ≤6 candles; the breakout must show ≥2 impulsive candles. 2. Freshness: Only trade untested zones (no prior price interaction). 3. Zone Merging: Combine overlapping zones or prioritize the one with the best risk-reward ratio. Entry & Trade Triggers 1. Breakout Confirmation Short Entry: Triggered when price breaks above prior-day high (PDH) and retests a fresh supply zone. Long Entry: Triggered when price breaks below prior-day low (PDL) and retests a fresh demand zone. 2. Order Placement Buy Limit Orders: Set at the demand zone’s proximal line Sell Limit Orders: Set at the supply zone’s proximal line Risk Management Framework 1. Stop Loss Placement Long Trades: Below the demand zone (mechanical rule) or 5% of the Daily Average True Range (ATR) below the distal line of demand Short Trades: Above the supply zone (mechanical rule) or 5% of Daily ATR above the distal line of supply 2. Position Sizing Risk ≤1-2% of capital per trade to preserve longevity. Trade Management & Profit Targets 1. Initial Target: 2:1 Risk-Reward (2R). Example: If risking ₹1000, target ₹2000 profit. 2. Trailing Stop : Move stop loss to breakeven at 2R, then trail for 3R+ using price structure (e.g., swing lows/highs). 3. Priority: Focus on “A+ Setups” where zones align with higher timeframes (for example a 5 mins zone within a 15 mins zone or higher) Critical Success Factors 1. Timing is Everything Optimal Entry Window: 9:15 AM – 11:00 AM (peak liquidity, institutional participation). Avoid Late Trades: Post-2:00 PM entries often lack momentum for robust risk-reward outcomes. 2. Confluence with Higher Timeframes - Strengthen signals by aligning 5/15-minute zones with hourly/daily support/resistance/supply/demand zones 3. Event-Driven Volatility Capitalize on gaps from overnight global news (e.g., US Fed, crude oil prices) or domestic catalysts (RBI policies, earnings). Tools & Execution Charting: Trading View for automated PDH/PDL and zone plotting Mindset: Discipline to avoid overtrading and stick to fresh zones. Example: The example taken here is on the Nifty 15 mins chart. See how the price broke the previous day's low and reacted nicely from a prior higher quality demand zone. These levels can act as trap levels trapping most of the retail traders and investors on the opposite side of the trade. The price gave a nice bounce from the demand zone and went on to rally to the opposing supply zone giving a greater than 3:1 R:R. Conclusion The Intraday Sutra strategy combines technical precision with rigorous risk management, offering a structured way to navigate India’s time-bound markets. By focusing on prior-day extremes, fresh supply-demand zones, and strategic timing, traders can systematically exploit intraday inefficiencies. Remember: Consistency beats complexity. Back test rigorously, refine your process, and let discipline drive profitability. Final Note: Always validate this strategy in a simulated environment before deploying live capital. Use Trading View Bar Replay functionality to test your strategy. Markets evolve—stay adaptive!
NSE:NIFTYEducation
by VishalSubandh
6
Ed Seykota: The Trend-Following Legend Every Trader Must Know!Ed Seykota: The Mastermind Behind Trend Following Hello, traders! 🚀 I hope you're all doing great in life and in your trading journey. Today, I bring you an educational post on Ed Seykota , one of the most successful traders of all time and a pioneer of trend-following strategies . His ability to ride trends and manage risk has made him an inspiration for traders worldwide. Seykota revolutionized trading in the 1970s by developing one of the first computerized trading systems . He transformed a small trading account into millions using a disciplined, rule-based approach. His philosophy focuses on cutting losses early, riding winning trades, and following the market trend without emotional bias. 🔥 Ed Seykota’s Golden Rules of Trading The Trend is Your Friend: Trade with the prevailing market trend. Fighting the market leads to unnecessary losses. Cut Losses Quickly: Holding onto losing trades is a mistake. Accept small losses and move on to the next opportunity. Ride Winners Until the Trend Ends: Let your profits run. Exiting too early limits your potential gains. Risk Management is Crucial: Never risk too much on a single trade. Capital preservation is key to long-term success. Follow a Systematic Approach: Avoid emotional decisions. A well-defined strategy ensures consistency. Markets are Unpredictable: No trade is certain. Focus on probabilities and proven strategies rather than predictions. 🚀 What This Means for Traders: By applying trend-following strategies , risk management , and disciplined execution , traders can navigate market uncertainty, avoid emotional decisions, and maximize long-term profitability. 🎯 Final Thought: Ed Seykota once said: “Win or lose, everybody gets what they want from the market.” The key is to develop the right mindset and stick to a solid strategy . 💡 What’s your biggest takeaway from Seykota’s trading philosophy? Share your thoughts in the comments! 👇
NSE:NIFTYEducation
by TraderRahulPal
4
Time-Tested Tips for Better Risk Management in Trading 📝 Develop a Trading Plan • Start with a Plan: Avoid jumping into trades without preparation. A solid trading plan is your blueprint for success. • Key Components: Define your entry points, stop-loss levels (to limit losses), and target profit levels in advance. • Why It Matters: A structured plan provides clarity during stressful trading situations and ensures consistency with your risk tolerance. ________________________________________ 🧘‍♂️ Understand Your Risk Tolerance • Self-Reflection: Assess your emotional and psychological response to risk. Know your comfort level with losses, market fluctuations, and stress. • Financial Awareness: Factor in your income, savings, debts, and expenses to gauge how much risk you can afford. • Personalization is Key: There’s no one-size-fits-all strategy. Tailor your risk management approach to your account size, goals, and unique circumstances. ________________________________________ 📚 Follow Your Trading System • Have a Clear System: Establish rules for entering and exiting trades to maintain discipline and avoid impulsive decisions. • Backtest and Research: Test your system against historical data and simulate performance in different market conditions. • Stick to It: If your system has a proven edge, trust it. Jumping between strategies after losses often leads to bigger losses. ________________________________________ 🚨 Use a Stop-Loss • What is a Stop-Loss? A predefined price level where you exit a trade to limit potential losses. • Why It’s Important: Prevents emotional decision-making and ensures you quantify your risk before entering a trade. ________________________________________ ✂️ Manage Your Position Size • Avoid Overexposure: Adjust your position size to manage risk effectively and avoid putting too much capital into one trade. • Diversify: Don’t put all your eggs in one basket unless you fully understand and accept the risks. Risk-Reward Ratios: Quick Reference 1:2 Risk-Reward • Risking $1 to make $2 • Win 33% of the time to break even. • Common for day and swing traders aiming for moderate profits. • Example: Stop-loss at 10 pips, target profit at 20 pips. ________________________________________ 1:3 Risk-Reward • Risking $1 to make $3 • Win 25% of the time to break even. • Ideal for trades with a high-probability setup and larger moves. • Example: Stop-loss at $50, target profit at $150. ________________________________________ 1:5 Risk-Reward • Risking $1 to make $5 • Win 17% of the time to break even. • Suitable for trend-following strategies or breakout trades with significant momentum. • Example: Stop-loss at 5% of capital, target profit at 25%. ________________________________________ ❌ Don’t Overtrade or Revenge Trade • Control Impulses: Avoid the urge to overtrade or recover losses through high-risk trades. • Stay Rational: Emotional trading can lead to poor decisions and bigger losses. Trade with a clear head and logic. ________________________________________ 📔 Maintain a Trading Journal • Track Your Trades: Document your trades to identify patterns, mistakes, and areas for improvement. • Enhance Strategies: Regular reviews help refine your approach, improve risk management, and evolve as a trader. • Accountability: A journal instils discipline and serves as a learning tool for future trades. ________________________________________ ✅ Final Reminders • Trade with discipline, not emotions. • Always align your strategies with your risk tolerance and financial situation. • Remember, trading is a marathon, not a sprint—stay consistent and patient. ________________________________________ Note- The Magic Formula for Lot Size Calculation (1% Risk) Formula = 1% of Capital/Stop Loss in Pips/10 Example Scenarios: Capital = $5,000 | Stop Loss = 30 pips: in XAUUSD 1% of capital = 50$ Lot size = 1% of Capital/Stop Loss in Pips/10 = 50/30/10 = 0.16 🚀 Thanks for reading! Drop your thoughts or additional tips in the comments below. Let’s grow and trade smarter together! Cheers! 🌟
OANDA:XAUUSDEducation
by silverwolftraders029
Ray Dalio’s Investing Secrets: Risk & Diversification!Hello everyone, I hope you all are doing great in life and in your trading journey. Today, I have brought another educational post, this time on Ray Dalio—one of the most successful investors and the founder of Bridgewater Associates. His journey from losing everything to building the world’s largest hedge fund is truly inspiring. Dalio’s principles on risk management, diversification, and systematic investing have helped countless traders navigate the markets successfully. Let’s dive into his key lessons and see how we can apply them to our own trading and investing journey! 🚀 Ray Dalio’s Key Trading & Investing Principles Embrace Radical Truth & Mistakes: Mistakes are the best teachers. Analyze failures, learn from them, and improve your strategy. Diversification is Key: Dalio’s famous "All Weather Portfolio" is designed to survive in any market condition. Never put all your money in one asset. Don’t Rely on Predictions Alone: Markets are uncertain. Focus on probabilities, risk management, and adjusting strategies instead of blindly predicting. Balance Risk & Reward: Smart investing is about managing downside risks while maximizing returns. Never take excessive risks on a single trade. Be Open-Minded & Adaptable: The best traders are always learning, evolving, and adjusting their strategies based on new data. Follow a Systematic Approach: Investing should be rule-based and emotion-free. Stick to a clear framework to avoid impulsive decisions. What This Means for Traders: By following Dalio’s principles, traders can manage risks better, survive market crashes, and create a long-term winning strategy. Outcome: Applying these lessons will help you develop a disciplined, well-diversified, and sustainable approach to trading and investing.
NSE:NIFTYEducation
by TraderRahulPal
Paul Tudor Jones: From Failure to Billionaire TraderHello everyone, I hope you all are doing great in life and in your trading journey. Today, I have brought another educational post, this time on Paul Tudor Jones—a legendary trader known for his exceptional risk management, market predictions, and macro trading strategies. His ability to anticipate market cycles and protect capital has made him one of the greatest traders in history. Let’s dive into his key trading principles and learn how to apply them in our own trading and investing to achieve long-term success! Paul Tudor Jones is a legendary hedge fund manager known for predicting the 1987 Black Monday crash and making a 200% return while others lost billions. But his journey wasn’t easy. After graduating, he got a job as a floor trader, but he was fired for falling asleep on the job! Instead of giving up, he worked tirelessly, learning from his mistakes. In 1980, he started his hedge fund, Tudor Investment Corp, and focused on risk management, macro trends, and discipline. His breakthrough came when he predicted the 1987 market crash using historical data and shorted the market at the perfect time, securing one of the biggest trading wins in history. His journey proves that persistence, adaptability, and risk control are the keys to trading success. Paul Tudor Jones' Trading Rules for Success Risk Management is Everything: Always protect your capital first. Jones emphasizes that good traders play great defense, not just offense. Cut Losses Quickly: Never hold onto a losing trade hoping it will turn around. Jones believes in taking small losses early to avoid major damage. Ride the Winners: Let profitable trades run while keeping a trailing stop-loss. This helps maximize gains while minimizing risks. Anticipate Market Crashes: In 1987, he predicted Black Monday and made a 200% return by shorting the market. He believes in preparing for extreme market events. Focus on Macro Trends: Jones follows economic cycles, interest rates, and global events to understand market movements. Have a Trading Plan: Every trade should be backed by analysis, a strategy, and a risk-management plan. Don’t trade based on emotions. Be Adaptable: Markets evolve, and so should traders. Jones always adjusts his strategies based on new data and changing trends. What This Means for Traders: By applying Paul Tudor Jones’ principles, you can develop a disciplined and flexible trading strategy that focuses on risk management and long-term success. Outcome: These lessons will help traders protect capital, identify big opportunities, and manage market cycles effectively—just like Paul Tudor Jones.
NSE:NIFTYEducation
by TraderRahulPal
2
Jesse Livermore’s Trading Secrets: Master the Market Like a ProHello everyone, i hope you all will be doing good in your life and your trading as well. Today again i have brought an educational post on Jesse Livermore and he was a legendary trader known for his market timing, trend-following strategies, and risk management principles. His insights on speculation and discipline remain highly relevant for traders today., So let's Start and apply this in your Trading and Investing to achieve Success. The Market is Never Wrong: Instead of blaming the market, analyze your own mistakes and improve your strategy. Trend is Your Friend: Always trade in the direction of the prevailing trend. Avoid going against strong market momentum. Patience Pays: Wait for the perfect trade setup before entering a position. Rushing into trades leads to losses. Cut Losses Quickly: Never hold onto losing trades hoping they will recover. Exit bad trades early to protect capital. Let Profits Run: When you’re in a winning trade, don’t exit too soon. Ride strong trends to maximize gains. Trade with Conviction: Only enter trades when you have a well-researched, confident strategy—never trade based on emotions. Avoid Overtrading: Trading too frequently increases risk and reduces profitability. Focus on quality trades, not quantity. The Market Repeats Itself: Market patterns and cycles tend to repeat. Study history to recognize opportunities. Control Your Emotions: Fear and greed are a trader’s worst enemies. Maintain discipline and follow your strategy. What This Means for Traders: Following Jesse Livermore’s trading principles can help traders develop discipline, manage risk effectively, and build long-term success in the market. Outcome: By applying these strategies, you can improve your trading psychology, avoid common pitfalls, and trade more confidently in any market condition.
NSE:NIFTYEducation
by TraderRahulPal
1
Mastering Emotional Discipline: The Key to Trading SuccessMastering Emotional Discipline: The Key to Becoming an Emotionless Trader Trading is not just about strategies or market knowledge—it’s a mental game. It tests your patience, your discipline, and most importantly, your ability to keep emotions in check. If you’ve ever felt fear, greed, or overconfidence while trading, you’re not alone. The truth is, even the most seasoned traders struggle with emotions. But what sets successful traders apart is their ability to master these emotions and make decisions based on logic, not impulse. Let’s dive into why emotions are a challenge and how you can conquer them to trade with confidence and consistency. _______________________________________________________________ Why Emotions Are a Trader’s Biggest Challenge Trading can feel like a rollercoaster ride. One moment you’re on top of the world with a winning streak, and the next, you’re doubting every decision after a loss. Here’s how emotions like fear, greed, and overconfidence can impact your trading: Fear: The fear of losing money can paralyze you. It might make you close trades too early or avoid taking trades altogether, even when they align perfectly with your strategy. Greed: That voice in your head saying, "Just a little more profit," can push you to overtrade or hold on to losing positions longer than you should. Overconfidence: After a few wins, it’s easy to feel invincible. But overconfidence often leads to risky decisions and can derail your trading plan. The key is not to eliminate these emotions but to recognize and control them. _______________________________________________________________ What Happens When Emotions Take Over? Fear Makes you second-guess yourself. Leads to missed opportunities or premature exits. Keeps you stuck in your comfort zone, limiting your growth. Greed Encourages overtrading, depleting your capital. Makes you hold onto trades too long, hoping for a miracle. Clouds your judgment, causing you to ignore your strategy. Overconfidence Makes you take unnecessary risks. Leads to impulsive trades based on gut feelings rather than logic. Prevents you from learning from mistakes because losses feel like exceptions. _______________________________________________________________ How to Trade Without Emotions? The goal isn’t to suppress your emotions—it’s to master them. Here’s how: 1. Stick to a Clear Plan Have a plan for every trade. Know your entry, exit, and stop-loss levels before you even place the order. Treat your strategy like a trusted friend—it’s there to guide you, so stick with it, no matter what. 2. Master Risk Management Protect your capital. Limit your risk to 1-2% of your portfolio per trade. Diversify your investments to avoid getting too emotionally attached to a single trade. Position sizing is your secret weapon—use it wisely. 3. Keep a Trading Journal Write down everything—why you entered a trade, how it played out, and how you felt. Reviewing your journal helps you spot patterns and understand what works (and what doesn’t). It’s not just about tracking numbers; it’s about understanding yourself as a trader. 4. Leverage Technology Use tools like stop-loss and take-profit orders to keep your emotions out of decision-making. If you’re tech-savvy, explore algorithmic trading to automate your strategy. Let alerts and notifications do the heavy lifting while you stay focused on the big picture. 5. Develop a Mindful Mindset Take breaks during your trading day. Sometimes stepping away is the best move you can make. Practice mindfulness—deep breaths or even a few minutes of meditation can help you reset. Accept that losses are part of the game. Learn from them and move on. _______________________________________________________________ The Outcome When you master emotional discipline, trading becomes less stressful and more rewarding. You’ll make decisions based on logic, avoid costly mistakes, and see consistent progress over time. Remember, it’s not about being emotionless—it’s about staying in control. Every successful trader started where you are today. The difference is they learned to trust their process and stick to their plan. You can do the same. If you found this post helpful, give it a like and follow! I’m here to share more insights to make your trading journey smoother and smarter. Don’t forget to check out my profile @TraderRahulPal for more educational content and actionable trading ideas. Let’s grow together! 🚀
NSE:NIFTYEducation
by TraderRahulPal
Adapting to SEBI's New Rules: A Guide for Retail Options TradersIntroduction The Securities and Exchange Board of India (SEBI) has recently announced new regulations aimed at strengthening the equity index derivatives framework. These changes, set to be implemented in stages from November 2024 to April 2025, will significantly impact retail options traders. This article explores the new rules, their implications, and how traders can adapt their strategies to thrive in this evolving landscape. www.sebi.gov.in New SEBI Rules and Their Impact: Navigating the world of options trading in India just got a little more interesting with the introduction of new regulations by the Securities and Exchange Board of India (SEBI). For retail traders who are trying to figure out how to adapt to these new rules, understanding the key details is a good first step. Let’s dive into the specifics of these regulations and their effects on trading practices. 1. Upfront Collection of Option Premium: Starting February 1, 2025, traders will be required to pay the full options premium upfront. This measure aims to reduce excessive leverage and discourage positions beyond available collateral. Impact: This will limit the number of contracts traders can buy, potentially reducing overall market participation but also encouraging more responsible trading practices. 2. Removal of Calendar Spread Treatment on Expiry Day: From February 1, 2025, the benefit of offsetting positions across different expiries (calendar spread) will not be available on the expiry day for contracts expiring that day. Impact: This could lead to increased margin requirements on expiry days, affecting traders who rely on calendar spread strategies. 3. Intraday Monitoring of Position Limits: Beginning April 1, 2025, exchanges will monitor position limits intraday, with a minimum of 4 random snapshots daily. Impact: Traders will need to be more vigilant about their position sizes throughout the trading day to avoid penalties. 4. Increased Contract Size: After November 20, 2024, new index derivatives contracts will have a minimum value of Rs. 15 lakhs, up from the current Rs. 5-10 lakhs range. Impact: This change may price out some smaller retail traders from the market, but it also encourages more serious participation and potentially reduces market volatility. 5. Rationalization of Weekly Index Derivatives: From November 20, 2024, each exchange will offer weekly expiry contracts for only one benchmark index. Impact: This could concentrate liquidity in fewer products, potentially leading to better price discovery but also limiting trading options. The exchanges Bombay Stock Exchange (BSE) and National Stock Exchange(NSE) will have to select 1 index from the existing for weekly expiry and the rest will be monthly expiry. For example, there is a possibility that NSE may opt to go for Bank Nifty for weekly expiry and Nifty, Fin Nifty and Midcap Nifty for monthly expiry whereas BSE may opt to go for Bankex for weekly expiry and Sensex for monthly expiry. 6. Increased Tail Risk Coverage: Starting November 20, 2024, an additional 2% Extreme Loss Margin (ELM) will be levied on short options contracts on expiry day. Impact: This will increase the cost of writing options on expiry days, potentially reducing speculative activity. Overview of the New Regulations SEBI’s new rules are designed to ensure a more transparent and fair-trading environment. They cover a range of changes in how options trading is conducted, all aiming to protect traders and enhance market integrity. - Increased Transparency: SEBI is pushing for more transparent trading activities. This means traders will have access to more information and insights about market movements which can help in making informed decisions. - Higher Compliance Standards: With a stronger emphasis on compliance, SEBI is keen on maintaining robust regulatory practices. This is to prevent issues like fraud or market manipulation from affecting retail traders. - Leverage Control: New rules have introduced strict controls on leverage, which impacts the amount of capital a trader can use relative to the actual cash they have. While this might seem restrictive, it’s intended to lower risk and safeguard trader investments. Key Changes Affecting Retail Options Traders Retail options traders have specific adjustments to make under these new rules. Here are some of the key changes directly impacting you: 1. Portfolio Diversification: With increased costs and limitations in options trading, diversifying across different asset classes and strategies becomes crucial. Consider including a mix of stocks, ETFs, and other derivatives in your portfolio to spread risk. 2. Shift to Swing/Positional Trading Style: The new rules may make intraday trading less attractive due to increased monitoring and costs. Traders should consider shifting focus to swing or positional trading strategies that align with longer-term market trends. 3. Focus on Risk-Defined Strategies: With higher margin requirements and upfront premium payments, traders should prioritize risk-defined strategies like spreads (bull call spreads, iron condors) over naked options positions. These strategies offer better risk management and capital efficiency. 4. Continuous Education: Stay updated with market developments and enhance your trading skills through trading reputable education providers. Focus on advanced options strategies, risk management techniques, strategy optimization and market analysis to adapt to the changing landscape. Best Practices: 1. Proper Position Sizing: With stricter position limits, ensure your trades are appropriately sized relative to your account. 2. Regular Portfolio Review: Frequently assess your positions to ensure compliance with new regulations and to optimize your strategy. 3. Use of Technology: Leverage trading platforms and tools that can help monitor positions and calculate margins in real-time. 4. Risk Management: Implement strict stop-loss orders and consider using options to hedge your portfolio. Conclusion: The new SEBI regulations present both challenges and opportunities for retail options traders. While they may initially seem restrictive, these rules aim to create a more stable and fair market environment. By adapting strategies, focusing on education, and implementing best practices, traders can navigate these changes successfully. The key lies in embracing a more disciplined, risk-aware approach to trading, which ultimately contributes to long-term success in the markets. As the derivatives landscape evolves, those who adapt quickly and intelligently will be best positioned to capitalize on new opportunities while managing risks effectively. Disclaimer Investment in securities market is subject to market risks, read all the related documents carefully before investing.
NSE:NIFTYEducation
by VishalSubandh
7
4 STEPS FOR A BETTER TRADERHello Guys according to mine experience and knowledge Some things I think are necessary to become a Better trader, so I am sharing all of them with you. ⚡⚡TRADING TOOLS-: (Contains Indicators & Other Soft tools like Screeners Or other software) So as we all know that a after a good Physical Setup (internet connection, Computers or other gadgets) we also need some other tools like indicators or screeners and alerts in our system for better trading and quick executions. So these all things should be Good and make sure that the indicators which you are using are Backtested properly by paper trading or by virtual trading. KEY TAKEAWAYS -:Technical traders and chartists have a wide variety of indicators, patterns, and oscillators in their toolkit to generate signals. -:Some of these consider price history, others look at trading volume, and yet others are momentum indicators. Often, these are used in tandem or combination with one another. ⚡⚡TRADING SYSTEM-: A trading system is a set of rules that can be based on technical indicators, chart or candlestick pattern where a system tells the trader when and how to trade, likewise a long term trader or investors taking trades or doing investments on fundamentals basis and so it is known for sure that the more familiar a trader is with their trading system, the better their odds at being consistently profitable so always try to learn more than trade for getting a good trading system. ⚡⚡RISK MANGEMENT-: Risk management includes the Stop loss, portion size of trade and capital allocation in trades from which you can define how much risk you can take in any of trade or investments which are pre-defined according to you trading system and the basis of identified stop losses for entry or exits which helps cut down losses. It can also help protect traders accounts from losing all of its capital. KEY TAKEAWAYS -:Trading can be exciting and even profitable if you are able to stay focused, do due diligence, and keep emotions at bay. -:Still, the best traders need to incorporate risk management practices to prevent losses from getting out of control. -:Having a strategic and objective approach to cutting losses through stop orders, profit taking, and protective puts is a smart way to stay in the game. ⚡⚡MINDSET-: (LAST BUT NOT THE LEAST, MOST IMPORTANT) The correct mindset in trading is one that is dedicated, focused, disciplined, confident, has no ego, has no fear of losing, and has detachment to money. For those not into trading, this might sound a little weird. Most traders focus on developing strategies in order to make money. If you have developed profitable trading edges and trading strategies, it’s time to move on to the next level, which is developing a good mindset for trading. The correct mindset in trading makes you follow your trading edges and strategies! When you get experience in day trading or other time frames in trading you’ll discover that trading is certainly not as easy as it seems. Quite the opposite. If you can’t follow the rules of the strategies, you simply have no trading strategy. Trading discipline is what most traders need. The correct mindset in trading is what separates good and bad traders! SOME ADVICES-: A trader needs to be dedicated. A trader must know himself/herself. A trader stays focused all the time. Disciplined Trading always avoid compulsory or impulsive trading. Always separates confidence and overconfidence like a good Trader. 𝐑𝐞𝐠𝐚𝐫𝐝𝐬-: 𝐀𝐦𝐢𝐭 𝐑𝐚𝐣𝐚𝐧
NSE:NIFTYEducation
by AMIT-RAJAN
26
Emotions should not affect our trade management systemTrader should identify emotions that are affecting our trading management decisions, and find genuine solution to over come from the same to become a better trader. Most investors treat trading as a hobby because they have a full-time job doing something else. However, If you treat trading like a business, it will pay you like a business. If you treat like a hobby, hobbies don't pay, they cost you...! Disclaimer. I am not sebi registered analyst. My studies are for educational purpose only. Please Consult your financial advisor before trading or investing. I am not responsible for any kinds of your profits and your losses.
NSE:NIFTYEducation
by RK_Chaarts
4
Protecting Your Mental Health by Prioritizing Risk ManagementIn the world of trading and investing, it's common to hear the phrase "risk management" thrown around. But what exactly does it mean, and why is it so important? At its core, risk management is about protecting yourself from potential losses. This can include setting stop-loss orders, diversifying your portfolio, and carefully analyzing market trends before making trades. And while these practices are certainly crucial for preserving your capital, they're not the only benefits of prioritizing risk management. In fact, one of the most important reasons to focus on risk management is for the sake of your mental and emotional well-being. Trading can be an incredibly stressful and emotional experience, and without a solid risk management plan in place, it's easy to fall prey to anxiety, fear, and even panic. But when you take the time to establish a sound risk management strategy, you're not only protecting your investments - you're also safeguarding your mental health. By having a plan in place, you can make trades with confidence, knowing that you've taken steps to mitigate potential losses. And even if a trade doesn't go as planned, you can take comfort in the fact that you've prepared for the worst-case scenario. Perhaps most importantly, prioritizing risk management can help you achieve long-term success and sustainability in your trading career. By minimizing losses and avoiding rash decisions, you'll be able to build a portfolio that's resilient and capable of weathering the ups and downs of the market. So if you're looking to become a successful trader, don't overlook the importance of risk management. By taking steps to protect your capital and your mental well-being, you'll be setting yourself up for a lifetime of sustainable and profitable trading.
Education
by okako_trading
1
The Ultimate Rules for Options Day Trading SuccessNSE:BANKNIFTY Introduction If you want to be a successful options day trader, it's not just about having a good strategy. You also need to develop your expertise, seek guidance when needed, and be dedicated to your goals. To do this, you need to be disciplined and follow some options day trading rules. These rules can help you avoid common mistakes and take away the guesswork. Here are some rules that every options day trader should know and if you use them in a disciplined manner then they have been proven to help beginners become winning options day traders. Some important rules are :- Rule 1 Setting Realistic Goals for Options Day Trading One of the most important rules for success in options day trading is to have realistic expectations. Options trading is not a way to get rich quickly, but it can be a profitable career if you put in the time and effort to learn and master the craft. You need to be prepared for a learning curve and be willing to stick with it even when it gets tough. You should also expect losses, as no strategy can guarantee gains all the time. Good money and risk management can help minimize losses. Rule 2 Start Small to Grow Big When you're new to day trading options, it's important to be cautious. You're still learning about options trading and the financial market, so take your time. Don't rush into things, even if you're excited. Start by practicing with paper trading and then move on to smaller options positions. Gradually increase your positions as you become more familiar with day trading options. This approach helps you minimize your losses and develop a systematic method for entering positions. Rule 3 Know your limits You may be tempted to trade as much as possible to develop a winning monthly average but that strategy will have the opposite effect and land you with a losing average. Remember that every options trader needs careful consideration before that contract is set up. Never overtrade and tie up your Capital. Overtrading will make money for your broker not you. Rule 4 Get Prepared Mentally, Physically, and Emotionally for Options Trading To succeed in options day trading, you need to take care of your mental, physical, and emotional health. This means getting enough sleep, eating a healthy diet, exercising regularly, avoiding excessive alcohol and smoking, and reducing stress in your environment. These habits will help you stay alert and focused throughout the day. So, take the time to care for yourself and perform at your best every day. Rule 5 Do Your Homework Daily – Plan your day Before the market opens, study the financial environment and news to develop a daily trading plan. This is called pre-market preparation and it's essential to stay competitive and align your strategy with the day's conditions. Develop a pre-market checklist that includes evaluating support and resistance, checking the news, assessing volume and competition, determining safe exits for losing positions, and considering market seasonality. Rule 6 Analyse Your Daily Performance Track your options day trading performance daily to notice patterns in your profits and losses. This will help you understand why you're gaining or losing money and fine-tune your processes for maximum returns. Reviewing your daily performance will also help you make long-term decisions for your options day trading career. Rule 7 Pay Attention to Volatility Volatility is how likely the price will change over time in the financial market. It can be good or bad for an options day trader, depending on their goals and position. Many factors affect volatility, like the economy, world events, and news reports. Straddle and strangle strategies are helpful in volatile markets. There are three types of volatility: price, historical, and implied. Price is based on supply and demand, historical looks at past performance, and implied predicts future performance. Rule 8 Use Option Greeks Greeks are measures that help to determine an option's price sensitivity in relation to other factors. They are represented by letters from the Greek alphabet and are used in complex formulas to determine option pricing. Despite their complexity, Greeks can be calculated quickly and efficiently, allowing options day traders to use them to improve their trades for maximum profit. Delta, Gamma, Vega, Theta, Rho Learn about option greeks from here I hope you found this helpful. Please like and comment. Keep Learning, Happy Trading!
NSE:BANKNIFTYEducation
by SANJAYPATIDAR_
4
A practical guide to Risk management Hey everyone! 👋 While trading and investing offer the opportunity for profit, there is always the potential for loss. The most experienced traders know this best and in today’s post, we’re going to share several time-tested tips to help new traders and investors better understand financial risk and intelligent planning. 📝 Develop a Trading Plan • Many traders jump into the market without a thorough understanding of how it works and what it takes to be successful. • You should have a detailed trading plan in place prior to engaging in any trades. • Having a plan can help you stay calm under stress and ensure that you are trading within your risk tolerance. 🧘‍♂️ Understand your risk tolerance • Risk is subjective. Different traders have different personalities and systems, hence a different risk tolerance. • There is no “One-size-fits-all” approach. • Find out what suits your needs based on your account size, age, long-term plan, and other key variables that are specifically unique to your circumstances. Then, implement it accordingly. 📚 Follow your trading system • A trading system lays down a set of rules that can help a trader avoid impulsive decisions. • A trading system is essential because it requires you to think deeply about your approach to markets before you begin risking real money. • Traders should backtest and research their system under different market conditions. Ask yourself how you would perform in a bear market? Have you tried paper trading your system to see if it works? Have you discussed your system with others or asked for feedback? • Some traders hop strategies after a series of losses. This usually leads to more losses and is unproductive in the long term. • If your system has a verifiable edge, then sticking to it will help you in generating consistent returns over time. It will also help you stick to your original long-term plan as mentioned above. 🚨 Use a Stop-Loss • A stop-loss order is an order that is placed at a predetermined price level and can help in limiting your losses if the trade goes against you. It’s also used to ensure you’re sticking to your original trading plan or trading system. • In general, this predetermined price level is the level at which your trade idea gets invalidated. ✂️ Manage your position size • It's important to take an optimal position size so that there isn’t too much risk exposure in any given trade. • Trading is a game of probabilities. Hence, a trader should never put all his eggs in one basket and if he does, then he should be well aware of it. ❌ Don't overtrade or revenge trade • Although it can be tempting, it's never a good idea to try to recoup the losses by taking higher risks. • It's easy to feel strong emotions while trading. However, making decisions based on emotions rather than rational analysis can be a recipe for disaster. If you fear that this is happening, walk away from your computer. 📔 Maintain a trading journal •A trading journal can help you in identifying the shortcomings in your trading. • Evaluation of this journal at regular intervals will help you in understanding and in improving yourself. The trading journal is a tool to self-reflect on your journey. Thanks for reading! We hope you enjoyed this post. Please feel free to write any additional tips or pieces of advice in the comments section below! Please remember this is an educational post to help all of our members better understand concepts used in trading or investing. This in no way promotes a particular style of trading! See you all next week. 🙂 – Team TradingView Feel free to check us out on Instagram , and Twitter for more awesome content!
NSE:ADANIENTEducation
by TradingView
12
Traders Queries - October 2022Query 1 I have bought nifty 17750 CE 27th October @ 158 and when market fall, I again bought it @ 48. Can I hold till the month end? Query 2 : I shorted nifty @ 17200, but market is moving up. Can I carry forward my position as I expect market to fall from 18,000. Answer for query 1 : Option value erode each and every day. Even though the market went up, the predicted direction is right, because of decay it didn’t give profit as 17750 CE 27th October is trading at 40 now. Lesson : Option buying gives profit when the movement has momentum in it. During sideways market, option value wont gain, so we have to trade accordingly. We have to think about time decay when we trade in options. Answer for query 2 : Every trade should have stop and the amount of risk you can take. When we did not respect stop and get out of the trade when the market is moving in opposite direction of the trade, the loss increases and the capital has the risk of getting wiped out. This happens when we have a biased view about the market. Here the bias is market will fall and we look for the things which support it, which makes us unable to accept the real facts like 18000 is so far away from 17200 and its not worth taking the risk. Lesson : Bias formation affects our trade. These are different types of bias, but when we are concentrating on the facts, then it will become visible that our views are biased and we can rectify it.
NSE:NIFTYEducation
by vanathi
3
A beginner's guide to trading - Chapter 5As a newbie trader everybody has doubts like, “Am I analysing the charts well?”, “Does my analysis skills are improving?”, “Have I changed my trading style?” etc... How to know these? By journaling you can know and measure your progress. Best way to journal your analysis is using trading view and publishing your analysis. You can publish as private ideas, if you don’t want others to see it. Since the charts are dynamic, any time you can check your analysis and the market movement after that. Lets say person A has just started analysing and he use trend lines. In the above chart when the price breaks the trend line he plans to go short. The trend line break was good and gave good profit. In the above chart the analysis was to go long when the price break the trend line. After breaking the trend line the price went sideways. Very less movement only. The price was falling and plan was to go long once the down trend was over by breaking the trend line. The price gave break out upside, but did not sustain and went sideways. Analysis 1 : good move Analysis 2 : very small move. Analysis 3 : No move. Total – 3 worked – 2 Did not work – 1 Next step was to improve further. You can add conditions like volume support, current market situation. Analysis 1 : Price was unable to break the resistance and was falling from resistance so we can go short. Analysis 2 : Price was not having volume support to move up further. Analysis 3 : Less volume and did not move up. These observations you can do in live market only. First analyse, plan and be ready for market. Then during market hours, observe and trade. After market hours check how your analysis worked, how you traded, what mistakes you have done in analysis and trading. Make this process as a habit. If you did not develop this as a habit from the starting itself, then making it as a habit becomes a tough process. Journaling your trades help you to improve and measure your progress. Start today if you have not done it so far. Perfection comes from practise. Dont stress yourself by expecting perfection from day 1. As a trader you have to make yourself ready to face the market, adapt the market and measure you progress. Remember you can trade better than you think, if you follow this process.
NSE:AUROPHARMAEducation
by vanathi
7
A beginner's guide to trading - Chapter 4This question has been asked before. It has been asked now. I will be asked in future. What question is that? It is nothing but, “How to select stocks to trade?” From beginners to expert traders, everybody knows stock selection is important. Especially for intraday it is very important as same stock won’t give movement daily. There are two methods. One is to trade on active stocks and another is selecting a stock which has formed trade set up as per your strategy. Ok, now how to select stocks? For intraday, the stock you trade should be an active stock. If the price is above 400 rs means, generally the movement will be good. The price will move with momentum & show trend strength. The stocks you select should be -- Active -- Above 400 Rs -- No spikes in movement (very long upper & lower wicks). Let us take an example. Beml is in my active stock list. In the above chart on June 9th price was narrowing within a narrow range forming a symmetrical triangle. It means we can expect break out any side. I selected this stock to trade on June 10th. Next step is to prepare a trading plan. Bearish below 1330, I can go short if the price showed bearish strength with 10 points as stop. Bullish above 1350, I can go long if the price showed bullish strength with points as stop. When you have a list of active stocks, you can filter them by pattern formation like the above example and trade. Below is another example. In the above example, I have selected the stock because of the consolidation. I have expected consolidation break out once the price moves out of the zone. The levels are marked in the chart. Another method to select stocks is based on the strategy you use. I have posted the strategy used already. Please refer the link below if you have not read it. This trade set up forms in live market. So you have to wait for 15 minutes to know whether your trade set up has formed. These are just examples. Your strategy and trade set ups can have unique features depending on your trading style. It does not matter whether it is intraday or short term trading, always trade on stocks which is active and which forms the trade set up as per the strategy you use.
NSE:CNXPHARMAEducation
by vanathi
11
A beginner's guide to trading - Chapter 3In this chapter I am going to discuss about how new bie trader views the share market and the out come of it. After reading this my dear readers, write about your experience, so that it will help new people to avoid such costly mistakes. Mistakes are always costly here and beginners do that a lot. There two type of new bie traders. 1. Completely new to share market. 2. People who invest in stock market and willing to become traders. Most people when they are just new to share market, view trading as their “solution to financial problems”. Ex 1 : With 10,000 Rs I can make 20 to 30 thousand or at least double it per month. Ex 2 : I can take 50,000 Rs from my savings and triple it in a month. Ex 3 : I can borrow 20,000 Rs and earn for my monthly expenses. Ok, now logical explanation. Can you do brain surgery to a patient since brain surgeons are making huge amount for a single operation? You cant, right? Because you need to be a brain surgeon and should have good experience in surgery. So in trading, why do you expect you will rock the trading world without any proper education or practice or experience? Why share market should give money to an unskilful person? As a beginner you need to find out what type of trading suits you. Ex : Momentum trading, break out trading, trend following, scalping etc. Whatever capital you are using will be gone in few days or months without any knowledge about share market. After learning about technical jargons, you need to learn your emotions during trading. This process at least need 1 to 2 yrs depending on your stability in mind. Investment is different from trading : People who have made good money in investment think, if I can make this much profit in few yrs, I can make much more if I do short term trading or intraday. Investment, swing trade, short term trade and intraday are entirely different from each other and everything needs different skill set. Investment/trading based on news : Newbie traders or investors when they don’t have any technical knowledge think they can trade/invest based on news. In the above example the price tested the support before moving up even though the stock has good profit. In the above chart price gave good volume break out when the news was positive. 1st stock has more profit compared to 2nd stock, but 2nd stock has good movement. So trading or investing based simply on news is not enough. Check the option data to understand what majority of traders are positioning in the stock. In the above chart price broke the support and fall down even though the stock has good profit. It breaks the common belief that price will move up if it has positive news. Trading without having any technical knowledge is gambling. Dont gamble with your hard earned money. Great expectations without knowledge is dream. Good expectation with goal is a possibility.
NSE:CNXITEducation
by vanathi
6
Trader's Query - Over tradingQuery : How to control over trading? In last 4 sessions I made huge losses I keep on placing orders, once I get loss. Trading type : Intraday Trading Instrument : Index Reason : Lack of discipline & knowledge Lack of fear about money How to rectify: Trade based on well tested strategy Less or no trades on news days Targets vary depending on market situation Follow trading rules Example for trading strategy When you are ready to pay brokerages, lose money because of over trading, you can spend your time, energy and money to learn about trading.
NSE:NIFTYEducation
by vanathi
12
Trading ExecutionThis post is about simple entry,stop & exit,adapting the market movement. It will be useful to new traders. Watch it fully so that you wont miss important points. Most of the time we do analysis and market give completely different scenario to handle. In this post I have explained about the trading execution using my yesterday’s analysis. I have explained the entries & stop. Analysis - Reliance – Double top resistance @ 2400 – 2410. Mildly bearish. Price didn’t fall and went up. Analysis-HDFC – Trend line support – neutral. Today took support & gave 35 pts move. I have marked the entry in the video. Analysis-Infy – Consolidation –neutral. Today gave break out of 50 pts. Analysis-TCS – Trend line support – neutral. Took support. Analysis-ICICIBank - @ trend line support – neutral. Today gave 15 pts move. Analysis-HDFCBank – Consolidation – no trend. 40 pts move today. Analysis-SBIN – Consolidation – no trend. Gave upside break out for 10 pts. Analysis-Kotak Bank - @ trend line support –neutral. Took support and gave 50 pts move. Analysis-Axis bank – Descending triangle – bearish. Gave upside break out. I have shared the link in which I have done the analysis.
NSE:AXISBANKEducation
by vanathi
10
A simple trading strategy with ways to improve the winning edgeThere are lot of trading strategies which can be easily available. Whatever strategy you use, If you know how to increase the trading edge, and when to avoid the trade will help you to make money. I have taken a simple trading strategy known to most traders, but here I am going to explain how to take the trade which has more winning possibility. Strategy : Previous day high break out. Go long above 1st 15 mins candle high. Time frame : 15 mins Entry condition : 1st candle should close above the previous day high. Target : 1 : 2 or close at 3 or 3.15 pm if stop is not hit. Trail : Shift stop to entry once you get 1 : 1 profit Stop : Low of the 1st candle. Entry : Above the high of 1st candle. In this chart I have marked the previous day high. Now we will see about how to increase the trading edge or winning edge. On feb 25, the 1st candle volume was normal which indicates participants were not that much enthusiastic about the movement. Volume was not supporting and we did not get big movement as throughout the day volume did not pick up. 1st candle volume gave an indication that the trade was not having high edge. On Feb 28th, the 1st candle had good volume, but the candle was having selling pressure. So we take the trade after seeing the next candles formation. Here the candles were showing buyers interest in the stock. This trade was having good trading edge. On March 1st, 1st candle broke the previous day high & closed above it. Volume was good, but the high low difference was big. Position sizing will help but it most of the time we won’t get 1:2 rewards. This trade was not having high edge. On March 3rd volume was good, but it was a bear candle and closed below previous day high. So no trade. In this example, price broke the previous day high for 4 days. As per our strategy we got 3 trade set ups, but only one trade has high trading edge. This is how you can improve you winning rate in a trade. In this UPL chart, 1st candle broke previous day high, had good volume, but high/low difference was big and it did not give 1:2 profit. In this Bsoft chart, price close above the previous day high but the candle is having selling pressure and no trade in it. Whenever you decide to trade on a strategy, back test at least 100 trades to check the winning chances. Always place stop once you enter a trade. Market is having fast direction change nowadays and you should be prepared to handle it.
NSE:TATASTEELEducation
by vanathi
81
My reasons and Your reasons behind losses while trading.Why do people take losses in trading? The reasons or mistakes behind a trader make losses. I suggest you these reasons should not be repeated. If you might have also come to cross from this reason and got losses, you can type in comment number of specific reason what you have faced. In case, you also have another reason except in this post, please or kindly specify it in comment section . We will discuss it for a solution. 1). Stop following the right/perfect "trade-setup strategy" even if you are earning from it. For instance, you're going good in "breakout setup" but not following consistently, change suddenly/started to follow another pattern the setup. 2). Not enough Technical Knowledge. New traders just learn from YouTube or another resource about basic charting reading & indicators, such as MACD, chart pattern, trendline, etc. directly jump in practical trading with using full margin and later convert to loss. They believe trading is very easy but it's theoretically. In the practical, you need experience & practice a lot to earn. 3). Believing blindly on Other's Tips. A lot of traders pay high prices for tips/research/analysis and follow them blindly without applying margin management rules. As a result, they wipe out. I am not saying to ignore/avoid other research or analysis but you should apply margin management rules and also do paper trading on their research. 4). Try to cover loss, Expecting huge profit. When traders take a loss, they think to recover the loss by taking entry huge quantities to recover from little pips/points and fall into a huge loss. After taking a position with the perfect trade-setup, some traders expect more profit than the per-defined target. Later, they convert into loss because of changing setup. 5). You take risks that you can't afford to lose. Taking Unlimited Risk means, neither protective stop nor mental stop. Some people keep a 1:1 stop-loss and target ratio. Don't do this: "Holding losers trades while selling winners trades". 6). Lack of Emotion Control. Not following your own per-defined setup, for example, changing stop-loss or not exiting and expecting to recover, sometimes not booking profit and expecting more profit and finally convert into a loss. In more clear words, change your set-up frequently while real-time trading. Don't believe in Exit or Marry with Beliefs/Hopes(Hope is not a strategy). Believe in recover loss without any specific reasons and finally had to take a huge loss. I have seen in many new traders, they let Loose Grow and take a small profit. Avoid the words ‘hope”, “wish” or ‘feel’ when talking about a trade-setup. Believing that price cannot move higher/lower.
NSE:BAJAJFINSVEducation
by Trade-Technique
121
Trading with the 3M frameworkOne trade cannot make you rich, therefore it is important to not run behind every breakout trade and risk too much on a single trade. By working equaly on all the 3Ms of trading we can balance our emtions and trade effectively. Let's see how with the help of 3M framework we can trade above range breakout pattern. 1- Method Management Simple range breakout Price has respected the upper and lower trend lines multiple times which makes it a valid trend line. Now after the price breakout, the upper trendline which was previously acting as resistance will now act as support. We can place the stop loss just below the upper trendline. Exit immediately if the price fails to respect the upper trendline, do not hold the losing trade 2-Risk management: Risk only 2% of your trading capital Enter 30% of your position at CMP and if trades goes in our favor then execute your remaining 70% position. Be patient. Don't bet too soon . The point of entering with 30% position is if the trade goes wrong then our loss will be only on a 30% position. The whole idea is to lose less money when you are wrong and to win more money when you are right 3-Mind managment: Note= Trade with probabilistic mindset , no matter how much analysis you do there is always 50-50% chance. Our main objective is to ' 'Cut your losses short and let your profits run.'' To be profitable you don’t have to be right every time, you just have to be right big and wrong small. Remember that the trade we are taking is just 1 of the next 1000 trades we are going to trade. We should not get so much emotionally attached to it that we end up losing our sleep if it doesn’t go according to the plan. By minimizing the importance of that one particular trade, we can really trade with ease and would be in a better situation to take sound decisions. Note= Get in the habit of focusing on your trading system and following the process for entries, exits, and position size, rather than the money you are making or losing at any particular moment
NSE:ADANIENTEducation
by Indrajit08
3