#Knowledge
A 2016 post that I posted in AAFL Facebook group on max pain ... Might be useful from awareness perspective...

#FreeTip
An inside wk near All time high is a high prob indication of a big bo above ATH. How do you find those stocks? Every weekend Scan for1)inside wk candle AND
2) Stocks ab 30 wk MA AND
3) Upward sloping 30 WK ma for Atleast 6 months.
Eg : #Cyient last wk
#Suppetro 09/04/21

#FreeTip
A day trading setup CLUE for trading index / stocks for a living..Capturing a big move in adv.
If cpr is bearish,n price opens abv cpr with a 5-15 min bullish pa or price crosses abv cpr within first 30 min, it usually signals a big move ahead.
Vice versa for bull cpr.

Bullish cpr is shaded blue; Bearish cpr is shaded red. If u think that higher value cpr are necessarily bullish and vice versa , then ur Wrong … I will leave this concept for discussion.

#FreeTip
#Intraday
An intraday pattern that usually results in a big move; Doesn't occur very frequently; If it happens, most of the time the move is big.
Intraday VCP. - U shaped Higher lows (2-5) for an upmove (usually without HHs). n shaped LHs for downmove (usually w.o. LLs

Try identifying historically this pattern; if possible take screenshots of this pattern for your record and have a look at it as much as possible to practice your eyes to spot it in real market; and if u start spotting them perfectly, u r equipped with an edge... Free of Cost....

#MARKETS
In a bear mkt increase the tf to 6m / 1y, u will become bullish. Short and medium term bearish moves are actually long term pullbacks. Since 1990, there were only 9 bearish years out of 32.
.....

......6m chart - history says -30% to -65% bear moves. 30% drop leads to 12.5k. Time to do pyramid averaging SIPs every month.

#FreeTip An intraday pivot trading system rule snapshot for long and short and when not to take the long and short.
Handwritten rule.

The best spreads trader on Twitter: @Ronak_Unadkat

He trades in Nifty & Bank Nifty via spreads majorly.

In the Jainam Broking Speech, he shared how he trades debit and credit spreads:

Here's a breakdown of his 10 step method: 🧵

Collaborated with @niki_poojary

1. Why trade via spreads?

Overnight risk will be always capped
Limited Risk will keep you cool
Hedge our position

Strictly not to do for margin, as that will lead to overleveraging.

Traders Sell option for 100 and buy 10 rs option.

That is for margin reduction, not a spread.

2. Circuit:

If the market opens at the lower circuit or upper circuit, then our loss should be limited.

Eg - Expiry Trading on the 24th Feb Expiry

The market gapped down & traders lost huge sums of money.

Some lost 15% or 20% of their capital in a 4% index move.

If in 4% people are losing so huge then imagine if Modi says black money is back, we will open at an upper circuit.

If India-Pakistan tension news comes again we will open at a lower circuit.

In a 4% index move, people lost 10%, so in the case of a circuit, they will lose 50%.

To recover a 50% loss on capital, you need to make 100% returns with the leftover capital to break even.

In these cases, spreads cover your risk.

Even he lost 3-4% of capital on 24th but it is easy to recover in 1-2 months.

A THREAD

Topic: HOW TO TRADE IN RISING PREMIUMS SCENARIO

Option sellers specially Straddle sellers feel that rising premiums give them excellent opportunity to make easy money. So what they are seeing is the theta aspect of options & ignoring the delta/gamma/vega forces.

1/

With rising premiums come high delta moves. There is a reason why premiums are all increasing up in the first place. High uncertainty & fear is what's controlling the markets during such times. So a volatile 200 point move in nifty is always on the cards.

2/

Adjusting during such delta moves involves high slippages. Such costs go in our system & are irrecoverable. So if the ATM straddle is around 400 & after 200 point downmove, the next straddle is at 450 & the loss is not just 50points but compounded much more.

3/

Also there are chances that there is no decay throughout the day. So a straddle seller has to take that heavy risk of carrying it forward & chances of gap openings are high during such times. If converted into Ironfly, then the cost of the wings is too expensive.

4/

Thus cutting down the initial credit significantly.

There will also be very few instances when premiums don't fall till expiry day. So with each delta move the cost of holding a straddle gets accumulated & pressure keeps mounting for the stubborn option sellers.

5/

Since 99% of my own trades are in options, the calls I give are also on options. I am of the firm belief, that a basic knowledge of option greeks is necessary for any trader aspiring to trade options. For this, there are numerous books and even more resources on the net/youtube

However, a trader trying to learn Greeks face the problem of information overload. The problems are mainly 3
1. Either the text is too mathematical
2. Or the explanation is too simple just skimming the surface
3. In some cases, outright wrong info ( specially on youtube)

I have decided to make a video on options greeks in which I will try to explain simply ( without the maths 😀) but will go a bit more in-depth so that the info is usable by traders doing actual trades

Spent the major part of today designing the ppt ( 40 slides), hope to upload the video in the next few days. I will also provide the names of other resources which I have referred in making the video so that viewers can refer those texts for a more comprehensive understanding.

The video will be from the view of a trader/practitioner and not just a theoretical discussion.

I sincerely hope starters will be benefitted from my effort 🙏

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.