Traader — Trading Ideas on TradingView

Part 2 Master Candlestick Pattern 1. Liquidity Risk – When You Can’t Exit Some options, especially far out-of-the-money strikes or illiquid stocks, don’t have enough buyers and sellers. This creates wide bid-ask spreads. You may be forced to buy at a higher price and sell at a lower price. In extreme cases, you might not find a counterparty to exit at all. 👉 Example: Suppose you buy an illiquid stock option at ₹10. The bid is ₹8, and the ask is ₹12. If you want to sell, you may only get ₹8 — losing 20% instantly. Lesson: Stick to liquid contracts with high open interest and trading volume. 2. Assignment Risk – The Surprise Factor If you sell (write) options, you carry assignment risk. That means the buyer can exercise the option at any time (in American-style options). A short call may be assigned if the stock rises sharply. A short put may be assigned if the stock falls heavily. 👉 Example: If you sell a put option of Infosys at ₹1,500 strike, and the stock crashes to ₹1,400, you may be forced to buy shares at ₹1,500 — incurring a huge loss. Lesson: Always be prepared for early exercise if you are a seller. 3. Gap Risk – Overnight Shocks Markets don’t always move smoothly. They can gap up or down overnight due to global events, earnings, or news. This is gap risk. If you are holding positions overnight, you cannot control what happens after market close. Protective stop-losses don’t work in gap openings because the market opens directly at a higher or lower level. 👉 Example: You sell a call option on a stock at ₹500 strike. Overnight, the company announces stellar results, and the stock opens at ₹550. Your stop-loss at ₹510 is useless — you are already deep in loss. Lesson: Overnight positions carry additional dangers. 4. Interest Rate and Dividend Risk Option pricing models also factor in interest rates and dividends. Rising interest rates generally increase call premiums and reduce put premiums. Dividends reduce call prices and increase put prices because the stock is expected to fall on ex-dividend date. For index options or long-dated stock options, ignoring this can lead to mispricing. 5. Psychological Risk – The Human Weakness Not all risks come from markets. Many come from the trader’s own mind. Greed: Holding on for bigger profits and losing it all. Fear: Exiting too early or avoiding trades. Overtrading: Trying to chase every move. Revenge trading: Doubling down after a loss. 👉 Example: A trader makes a profit of ₹20,000 in a day but refuses to book gains, hoping for ₹50,000. By market close, the profit vanishes and turns into a ₹10,000 loss. Lesson: Emotional discipline is as important as technical knowledge. 6. Systemic & Black Swan Risks Finally, there are risks no model can predict — sudden wars, pandemics, financial crises, regulatory bans, or exchange outages. These are systemic or Black Swan risks. 👉 Example: In March 2020 (Covid crash), markets fell 30% in weeks. Option premiums shot up wildly, and many traders were wiped out. Lesson: Always respect uncertainty. No system is foolproof.

29:47

Part 1 Master Candlestick Pattern Introduction Options trading has always attracted traders and investors because of its flexibility, leverage, and the ability to profit in both rising and falling markets. Unlike simple stock buying, where you purchase shares and wait for them to rise, options allow you to speculate, hedge, or even create income-generating strategies. But this flexibility comes at a cost: risk. In fact, while options provide opportunities for huge rewards, they also carry risks that can wipe out capital quickly if not managed properly. Many new traders get lured by the promise of quick profits and ignore the hidden dangers. The truth is, every option trade is a balance between potential gain and potential loss — and understanding the nature of these risks is the first step to trading responsibly. In this guide, we’ll explore all major types of risk in options trading — from market risk and time decay to volatility traps, liquidity issues, and even psychological mistakes. 1. Market Risk – The Most Obvious Enemy Market risk is the possibility of losing money due to unfavorable price movements in the underlying asset. Since options derive their value from stocks, indices, currencies, or commodities, any sharp move against your position can create losses. For call buyers: If the stock fails to rise above the strike price plus premium, you lose money. For put buyers: If the stock doesn’t fall below the strike price minus premium, the option expires worthless. For sellers (writers): The risk is even greater. A short call can lead to unlimited losses if the stock keeps rising, and a short put can cause heavy losses if the stock collapses. 👉 Example: Suppose you buy a call option on Reliance Industries with a strike price of ₹3,000 at a premium of ₹50. If the stock stays around ₹2,950 at expiry, your entire premium (₹50 per share) is lost. Conversely, if you had sold that same call, and the stock shot up to ₹3,300, you’d lose ₹250 per share — far more than the premium you collected. Lesson: Market risk is unavoidable. Every trade needs a pre-defined exit plan. 2. Leverage Risk – The Double-Edged Sword Options provide huge leverage. You control a large notional value of stock by paying a small premium. But this magnifies both profits and losses. A 5% move in the stock could mean a 50% change in the option’s premium. A trader who overuses leverage can blow up their capital in just a few trades. 👉 Example: With just ₹10,000, you buy out-of-the-money (OTM) Bank Nifty weekly options. If the market moves in your favor, you might double your money in a day. But if it goes the other way, you could lose everything — and very fast. Lesson: Leverage is powerful, but without discipline, it’s deadly. 3. Time Decay Risk – The Silent Killer (Theta Risk) Options are wasting assets. Every day that passes reduces their time value, especially as expiry nears. This is called Theta decay. Option buyers suffer from time decay. Even if the stock doesn’t move, the option premium keeps falling. Option sellers benefit from time decay, but only if the market stays within their expected range. 👉 Example: You buy an at-the-money (ATM) Nifty option one week before expiry at ₹100. Even if Nifty stays flat, that option could drop to ₹40 by expiry simply because of time decay. Lesson: If you are an option buyer, timing is everything. If you are a seller, time decay works in your favor, but risk still exists from sudden moves. 4. Volatility Risk – The Invisible Factor (Vega Risk) Volatility is the heartbeat of options pricing. Higher volatility means higher premiums because there’s a greater chance of large price moves. But this creates Vega risk. If you buy options during high volatility (like before elections, results, or big events), you may pay inflated premiums. Once the event passes and volatility drops, the option’s value can collapse, even if the stock moves as expected. Sellers face the opposite problem. Selling options in low volatility periods is dangerous because any sudden jump in volatility can cause premiums to spike, leading to losses. 👉 Example: Before Union Budget announcements, Nifty options trade at very high premiums. If you buy expecting a big move, but the budget turns out uneventful, volatility drops sharply, and the option loses value instantly. Lesson: Never ignore implied volatility (IV) before entering an option trade.

32:38

Crypto Secrets Chapter 1: The Origins of Crypto and the Myth of Satoshi Nakamoto One of the greatest secrets in crypto is the true identity of Satoshi Nakamoto, the mysterious creator of Bitcoin. The world still doesn’t know if Satoshi was an individual, a group, or perhaps even a government-backed entity. The genius of Bitcoin’s design lies in its decentralization: once launched, it required no central authority. Hidden truths: Early adopters hold massive power. Roughly 2% of wallets own more than 90% of Bitcoin’s supply. These "whale wallets" can influence prices more than retail investors ever realize. Lost Bitcoins are a secret supply reduction. Estimates suggest that 3–4 million BTC are permanently lost (due to lost keys, forgotten wallets, or destroyed hard drives). This means Bitcoin’s real circulating supply is much smaller than its theoretical 21 million cap. Chapter 2: Blockchain Isn’t as Anonymous as You Think A common crypto myth is that Bitcoin and other coins provide anonymity. In reality, they offer pseudonymity: your wallet address isn’t tied to your name, but all transactions are permanently recorded on a public blockchain. Secrets revealed: Chain analysis firms like Chainalysis and Elliptic track suspicious activity for governments, exchanges, and law enforcement. Mixers and privacy coins (like Monero, Zcash) emerged to restore anonymity, but regulators are cracking down on them. Many criminals who thought they could hide using Bitcoin were later caught due to blockchain traceability. Chapter 3: The Secret World of Crypto Whales Crypto markets are highly influenced by whales — individuals or institutions holding massive amounts of coins. Unlike stock markets, crypto has fewer regulations against price manipulation. Whale strategies: Pump and Dump Schemes: Coordinated buying and selling to trap retail traders. Stop-loss hunting: Pushing prices down just enough to trigger retail stop-loss orders, then buying at a discount. Exchange influence: Whales sometimes move coins to exchanges to signal selling pressure, scaring the market. This explains why crypto price action is far more volatile than traditional markets. Chapter 4: Hidden Risks in Exchanges and Wallets Many beginners don’t realize: “Not your keys, not your coins.” Secrets of storage: Centralized Exchanges (CEXs) like Binance, Coinbase, and Kraken hold billions in user funds. But exchange hacks (Mt. Gox, FTX collapse) show that trusting them blindly is risky. Cold wallets vs. hot wallets: Cold wallets (offline hardware storage) provide maximum security, while hot wallets (online) are easier to hack. Private key recovery is nearly impossible. If you lose your keys or seed phrase, your crypto is gone forever. Chapter 5: DeFi — The Double-Edged Sword Decentralized Finance (DeFi) opened the door to permissionless lending, borrowing, and yield farming. But it also carries hidden risks. Secrets: Impermanent loss: A hidden risk for liquidity providers who assume yields are guaranteed. Smart contract exploits: Hackers regularly find vulnerabilities in DeFi protocols. Billions have been stolen. Ponzinomics: Many DeFi projects lure users with high yields, but rely on new deposits to pay old ones. Chapter 6: NFTs and the Psychology of Scarcity NFTs (Non-Fungible Tokens) exploded in 2021, selling digital art for millions. But the secret behind them isn’t art — it’s scarcity psychology. Most NFTs don’t hold intrinsic value. Their worth lies in community, hype, and perceived rarity. Many NFT projects secretly wash trade to inflate volumes and prices. While 99% of NFTs may fail, a few iconic collections (like CryptoPunks, BAYC) could retain long-term cultural value. Chapter 7: Crypto Tax Secrets Many traders ignore the tax side of crypto — often at their own risk. Crypto-to-crypto trades are taxable events in most countries. Even swapping BTC for ETH can trigger capital gains tax. Some jurisdictions treat crypto as property, not currency, leading to different tax treatments. Offshore exchanges and decentralized wallets make it harder for authorities to track, but governments are tightening KYC (Know Your Customer) regulations. Chapter 8: Insider Trading and Developer Secrets Another hidden truth: many crypto projects operate like insider playgrounds. Developers often pre-mine tokens or give themselves massive allocations before launch. Insider leaks about partnerships, listings, or upgrades often circulate before announcements. Exchange listings (like Binance or Coinbase) can pump a coin by 30–100% overnight — and insiders often know before the public. Chapter 9: CBDCs — The Hidden Threat to Crypto Freedom Central banks worldwide are developing CBDCs (Central Bank Digital Currencies). Unlike decentralized crypto, CBDCs give governments complete control over money. They can track every transaction in real-time. They can freeze or confiscate funds instantly. They can enforce monetary policies like negative interest rates. The secret fear among crypto enthusiasts: CBDCs could be used to reduce demand for decentralized currencies, forcing people into government-controlled money systems. Chapter 10: Trading Secrets in Crypto Markets Successful traders use strategies hidden from most retail participants. Volume profile analysis: Studying where most trades occur to predict support and resistance zones. Market structure cycles: Crypto follows phases (accumulation → uptrend → distribution → downtrend). Derivatives dominance: Futures and options trading now drive much of Bitcoin’s volatility. Retail traders often fall for FOMO (Fear of Missing Out), while pros accumulate quietly during fear and sell into euphoria. Conclusion: The True Secret of Crypto The biggest secret is not about a single coin, strategy, or hack — it’s about mindset. Crypto rewards those who: Educate themselves deeply. Manage risks intelligently. Stay patient across cycles. Avoid the traps of hype and fear. In the end, crypto is a mirror of human psychology — greed, fear, belief, and innovation. The secret is to understand these forces and position yourself wisely.