For the newbies of Options Trading. (Pay it forward post)

For the newbies of Options Trading. (Pay it forward post)

If you’re just getting into Options trading and making losses, don’t get disheartened. Try to change your strategy.

Brief background i started scalp trading in Options about 4 weeks ago, of which I probably had a success rate of 10-12%, for the first 3 weeks. I was so frustrated and disheartened that i wanted to give up and go back to intraday trading in stock. I had started with Rs 35000 and was down to Rs 4500. My 2 main weaknesses that i identified were finding the right strike price and entering and exiting the trade at the correct time, which caused most of my losses or ate into my profits. I had about 12 – 13 indicators which in hindsight i really gave different indications and really confused me most of the time.

I have narrowed it down to about 5 indicators that really have increased my chances of finding the right trade. I’m sure there are more which others might point out but, I have found these the most helpful. They are as follows

EMA 34

EMA 50

Supertrend – 10, 2

VWAP

MACD

You can back test these indicators with the strike price and index and you’ll will find these have the accuracy of around 80-85%. It has enabled me to accurately identify the best strike price to trade in within seconds. I’m still working on my timing of entering the trade, but that will come only with experience.

Today, it has been a week since I’ve been using it and I’ve ended everyday in the postive. All in all i can happily say that from almost giving up to actually looking forward to trading has been a short but a good journey.

EDIT – CORRECTION TO SUPERTREND VALUES

Edit 2 – This is not trading advice but a mere suggestion to point you in the right direction. There can be more combinations that can be included based on your own requirement. So please exercise caution before trading.


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