JESSE LIVERMORE is considered the greatest trader of all time.

He was the richest person in the world during his time.

I've read majority of his books and picked out learnings which are relevant even today with examples of the current scenario.

1: Remember that stocks are never too high for you to begin buying or too low to begin selling.

This principle still holds true today in trading, especially trend following.

Most people think if a stock has run up too much, then it's price is high and it will reverse.

But a trader should always be on the right side of a trend.

For eg: Asianpaints has been making new highs constantly, the major money would've been by the people who were on the right side of the trend i.e long.

Never buy it just because it has fallen too much. Instead short it and make money.

2: “Being a little late in a trade is insurance that your opinion is correct.”

It's okay to enter in a trade after you have received confirmation from the market.

Trading after confirmation will make your sacrifice your profits but it will also protect you against the loss

HOW TO ADJUST A SHORT STRANGLE?

Gone are those days where a short strangle used to expire worthless without any adjustments.

Adjustments are a must when your initial view goes wrong which it will.

Listing down all the ways to adjust a short strangle WITH EXAMPLES below.

1: Rolling up/down:

If you've sold a short strangle and one side premium spikes, you can book the profitable side and roll it up to match the premium of the other side.

eg: If you've sold a 60rs call and a 60rs put. If the 60rs call goes to 100. Then book profits in put and sell a 100 pt put.

This is the most basic way of adjustment.

2: Rolling the losing side:

It's very similar to the above adjustment however, we will consider shifting the losing side instead of profitable side.

eg: If you've sold 50pt call and 50pt put. If the 50pt put spikes up and goes to 120. Sometimes, I wouldn't want to sell a 120 pt call.

Hence, I simply book loss in the put and sell a new put worth 50pts which is farther away from the previous put.

HOW TRADING FROM A CORPORATE ACCOUNT CAN HELP YOU TO SAVE TAXES?

Since I myself have started trading from a corporate account recently, I'll share about my reasons for doing so and how drastically it can help to reduce taxes.

1: Save taxes:

The prime objective was only and only to reduce taxes. There's no other reason to trade from a corporate account.

2: Form a Pvt Ltd company : I've formed up a Pvt Ltd company since that's what I was advised by majority of the people including my CA as opposed to LLP/HUF.

3: Claiming Expenses: This is the most beneficial aspect of a pvt ltd company.

You can literally claim any expenses in the name of the company. Some of them are:

- Rent expense: You can literally claim your office rent as an expense. Your registered office can also be your own house where you live.

Further you can also claim electricity expenses and what not.

HOW TO USE TECHNICAL ANALYSIS TO FORM A WEEKLY VIEW

A thread🧵

Got many DMs about how I form my weekly view in Banknifty and how do I analyze it.

In this thread I'll show you how I do it so that anyone can analyze Banknifty and other instruments the right way.

1: Weekly timeframe

One Should start analyzing with a weekly time on candlestick charts.

As you can see there is a clear resistance at 41940 level on weekly charts and a clear support on at 32000 level on the Banknifty chart.

Hence this is our bigger term range.

But the previous week's candle is a bearish candle hence our bias for the current week stays sell on rise.

2: Daily timeframe

Next step will be to analyse the daily timeframe charts to refine our view further.

TOP 10 TRADING BOOKS THAT MAKE YOU A BETTER TRADER

I've read a number of books on trading and these are top 10 of them which I found the most useful.

1: Reminiscences of a Stock Operator

This book is a biography of Jesse Livermore, world's greatest trader.

It highlights his trading principles and trading psychology along with how he made and lost his fortune.

2: Market Wizards

This book has interviews with the biggest traders in trading. They are sharing their setups, psychology, the way they think and their experiences.

It's definitely an amazing read.

3:Trading in the Zone

If you're suffering from psychological problems related to trading then this book will solve them!

It talks about all the emotions and psychological barrier a trader goes through and gives a way on dealing with them.

4:Trade Like a Stock Market Wizard by @markminervini

This is a timeless classic and it contains excellent swing trading strategies for people who like to trade stocks positionally.

HOW TO DO SHORT STRANGLES TO MAKE 1% WEEKLY INCOME CONSISTENTLY?

I've made majority of my money by short strangles and I'll explain one very easy short strangle strategy which you guys can follow.

I'll also explain the adjustments and risk management.

1: What days it should be done?

It has to be done on Monday to thursday.

You can skip Fridays as there's negligible decay and big delta moves.

2: Preferred Instrument:

Banknifty will be the preferred instrument, since it's high risk and high reward.

Moreover it has good premiums.

3: Criteria:

It has to be done when Banknifty is inside a range on the 15 min chart.

As we can see here, it was June 6th Monday and Banknifty was in a perfect range, which makes it ideal for short strangles.

4: Positon sizing:

Although we'll hedge our positions but you strictly don't have to use the margin benefit which you will receive.

Ideal qty which be 6 lots on each side on a 10L rs capital and 3 lots on 5L capital

HOW TO SAVE TAXES IN TRADING AS AN INDIVIDUAL?

A THREAD🧵

In this thread I'll list down all the legal ways in which you can save taxes on the profits you earned from the stock market.

1: Split your money between family members.

If you are trading with a good capital size, to lower taxes, you can always split your money in you family member's account. This greatly reduces your taxes.

It gets even better if they are not earning any money from other sources as there's no tax upto a certain income slab.

2: Claim expenses:

This is the best part. You can claim any expenses which are related to your business.

It could be :

- Rent: Rent of your office. If you're working from your house you can partially claim the rent of the house too.

- Devices: We can easily claim expenses on Laptops, mobile phones, ac, tv, fridge , etc. Anything that's related to the business.

- Internet and electricity: You can claim deduction on internet and electricity bill.

BENEFITS OF OPTION SELLING

Most of the successful traders here are option sellers.

Ever wondered why?

Why we have chosen option selling?

How to decide what strategies to use?

THIS IS THE ONLY THREAD YOU'LL EVER NEED!

Find out below

1: Theta decay

The biggest reason and one of the prime reasons is the theta decay.

Option sellers always have an advantage because the as time passes, the option premium falls even if the underlying instrument doesn't move.

2: Being wrong and still making money.

We as option sellers can be wrong with our market view and still end up making money because of the power of theta decay and adjustments to some extent,

3:Playing directional view

Option selling also enables us to take a directional view. Infact, directional view along with theta decay makes it a solid combination.

Debit spreads and credit spreads works great for a directional view.

4: Playing Neutral view

We can make money in option selling even if the market doesn't move as the otm options will go to 0 with the help of theta decay. It's the most fascinating thing.

MY TOP 10 POINTS TO BECOME A BETTER TRADER

A Thread🧵

Listing down some of my top learnings which has helped me improve my trading to a great extent and will help you too.

1: Always stay on the right side on trend.

The biggest money is made by being with the trend, not against it.

Traders who made it big were always trend followers.

2: Don't ever underestimate risk.

Big losses usually happens when a trader ignores risk management when he's on a winning streak.

Overconfidence usually leads to poor risk management which ultimately causes destruction.

3: Taking Risk on Profits made:

A trader should always take high risk trades on the profit which he has already made and not on his principal.

It's much easier to take risks on the profits than taking risk on principal capital and losing it.

4: Patience

Success in trading comes with patience. One should be willing to wait atleast 2 years before giving up trading.

You drastically improve your odds of success even if you just survive for a couple of years without losing much money.

WHAT IS OPEN INTEREST, HOW TO ANALYZE IT AND DOES IT WORK?

In the thread I'll explain everything about Open interest and also all the tools used to analyze it and my personal opinion.

THIS IS THE ONLY THREAD YOU'LL EVER NEED ON OPEN INTEREST.

1: What is Oi?

Support if Mr A buys 10 lots of 17000ce in Nifty and Mr B sells 10 lots of call in Nifty then the total Oi on 17000 strike price will be 10.

So Oi is basically the number of outstanding contracts which are not squared off.

2: What is Oi used for?

Oi is only used to determine support and resistance on a particular strike price.

For eg: Nifty 16000pe has the highest Oi and 16200pe has to highest Oi.

So 16000 and 16200 level can be considered as good supports.

In the same way, 16500 ce has highest Oi and it can be considered as a resistance.

3: But why?

Highest Oi at 16500ce indicates that highest number of people have sold it BUT it also means that highest number of people have Bought it!

If 16500 acts as resistance, the option will go to 0 and all the buyers will lose money.

Most of the successful traders here are option sellers.

Ever wondered why?

Why we have chosen option selling?

Find our below

1: Being wrong and still making money.

We as option sellers can be wrong with our market view and still end up making money because of the power of theta decay and adjustments to some extent.

Adjustments work better as get closer to expiry since decay is the highest.

2: Theta decay

The biggest reason and one of the prime reasons is the theta decay.

Option sellers always have an advantage because the as time passes, the option premium falls even if the underlying instrument doesn't move.

3:Playing directional view

Option selling also enables us to take a directional view. In fact, directional view along with theta decay makes it a solid combination.

Debit spreads and credit spreads works great for a directional view.

4: Playing Neutral view

We can make money in option selling even if the market doesn't move as the otm options will go to 0 with the help of theta decay. It's the most fascinating thing.

This is what attracted many into option selling.

This is the most important concept which made me great money in 2022.

This is the skill which is GUARANTEED to make you a better trader

Banknifty moves in 2 phases.

1: Consolidation
2: Trends

An understanding of both of these phases will take your trading to the next level.

Let's start with consolidation phase

It looks like this when Banknifty is stuck inside a range.

This is phase when you shouldn't be taking directional trades.

As market is mostly choppy and is good for mean reversion scalpers.

An option seller can initiate neutral strategies under such an environment.

Trending phase will look something like this

The price action is quick and furious at this time.

As you can see after a consolidation there is a strong breakdown.

How do I handle big overnight gaps?

As I mostly take neutral positions overnight, I've been asked this a lot. So here you go.

1 : Take the right position sizing:

If you have the correct position size then there's nothing to fear from big gaps.

I like to take positions in such a way that I don't lose more than 2-3: incase of a big gap. This provides mental piece.

2: Have a calm mind:

This is of prime importance and somethin where most of the guys have trouble. Constantly panicking is going to do no good. What's going to happen will happen.

Having a calm mind allows you to think and act more clearly.

3: The 3 way rule:
If the markets open a a big gap there are not just going to stay there. Three things can happen.

a) It can go up : In this case you can use the move to recover our money.

b)It can go down : Just like the previous point you can take good advantage of it.

c) It stays there: After a big gap, obviously the IVs will explode. If the market stays then, premiums will be high and it will provide excellent opportunity to play neutral and recover your losses or atleast some part of it.