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

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.

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.

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.

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.

A THREAD:

7 FREE OPTION TRADING COURSES FOR BEGINNERS.

Been getting lot of dm's from people telling me they want to learn option trading and need some recommendations.

Here I'm listing the resources every beginner should go through to shorten their learning curve.

(1/10)

1st Course - TASTYTRADE

This channel on YouTube is a goldmine for people wanting to learn about options both basics and advanced. By far the best and the most popular channel out there amongst option traders.

2nd Course - OPTION ALPHA

This channel is also pretty well known amongst option traders and they have laid out the path to generate consistent income trading options.

3rd Course - PROJECT OPTION

Lengthy videos explaining the benefit of trading options and has gone through

4th Course - TASTYTRADE

Another crash course on options by tastytrade. Different strategies have been compared while some focus on trade management is also

A thread on SCALING IN - OUT METHOD -

What is scaling in - out?

1. Scaling in is adding on to the positions when they move in our favor (Pyramiding).

2. Scaling - out is exiting the portion of the position when the trade moves in our favor.

I have explained about pyramiding in previous tweets.

// Why use scaling out instead of exiting all position at once ?

When you are using ALL - out method where you exit positions at once, mostly you use wider Trail SL as you want to capture big moves and exit all when trail sl hits.

The problem with this method is that either you make too big or many times your medium size winners turns out to become Scratch trades.

So, when we use the scaling out method, we are trying to capture most of our medium size trades , so that they do not turn into scratch trades.

// How to use scaling out method -

Say we have to got a signal to enter in a trade, and we have to buy 1200 qty according to our Position sizing.

So, we have to divide this 1200 qty into parts, how much? It depends on you.

We can divide into 3 parts, each part 400 qty.

THE TRADER'S EDGE: THINKING IN PROBABILITIES

Casinos make consistent profits day after day and year after year, doing something random

At the same time, most traders believe that the outcome of the market's behavior is not random,yet can't produce consistent profits

Thread 🧵

What casino owners ,professional traders know is that probable outcomes can also produce consistent results if you " Have an edge" and trade on a large enough sample size.

The best traders treat trading like a numbers game.

1. To illustrate, let's look at the game of blackjack-

In blackjack, the casinos have approximately a 4.5-percent edge over the player.

This means that casinos will make profit over a large enough sample size, even after several winning streaks and big profits of many players.

At the end of the day, week, month, or year, the casino always ends up with approximately 4.5 percent of the total amount wagered.

That 4.5 percent might not sound like a lot, but let's put it in perspective.

Suppose a total of $100 million dollars is wagered collectively at all of a casino's blackjack tables over the course of a year. The casino will net $4.5 million.

What casino owners and pro traders understand about the nature of probabilities is that each individual hand played

Life is a continuous journey of going through peaks and troughs of Happiness and struggle.

We can only see the Happy part of other lives, but ignore what they might have gone through to achieve that.

But let me tell you, even if someone is at ease right now, doesn't mean that he will continue to be at ease for their whole life.

The struggle will come again and we will have to go through it ,whatever we do, whoever we are , we have to cross that river of pain.

Even,In trading there are times when nothing works out, you go through long time and money draw-downs.

Even if you think you are a master, you have to go through it.

If you are struggling right now, don't lose hope as the tables will turn.

But remember to work as hard as you can and do as much good work as you can in your ease or Joyful time of life, because the tables will turn again.

Thank you for reading.

Trader knight.

@AdityaTodmal @niki_poojary I think the best Indian channel for Options Selling is @ThetaGainers, by far!