1/ Market Musings is back but with a glitch so here's the tweetstorm instead. December set some capital markets records. DoorDash, Airbnb and Wish all priced $1bn+ IPOs leading up to the Christmas holiday.

“In search of the holy grail”

A thread-

Holy grail- A strategy Which can make money all the time.

After going through two phases of a traders journey, the initial success phase, and Only why do i get loss phase, Traders enter the third phase -

THE SEARCH FOR THE HOLY GRAIL PHASE.

This phase has no limits, It can end in 1 month and it may not end till lifetime.

What exactly is this phase?

When a trader covers all the basics, they know how to lower their losses, they know the power of risk management.

And few of them may even develop their edges and systems over time.

But after some time, they feel that they are doing something wrong and there is more to trading than what they know.

THEN COMES THE HOLY GRAIL PART-

Few of them start to Read more books about trading,finding articles about “How to win 100% of the time” and listening to Youtube videos of few big traders who make big in trading.

1/x Vanna is back & ready to turn back on the charm! Overnight the market hit our weeklong target of **3705 and pulled back... We were able to take profits & play for a bit of morning digestion. It’s been a nice +3.5% in a week w/a few extra scalps along the way...But the best

2/x part has been the gift of Vol compression, which along w/ short Vol profits, has given us significant calendar expansion & dispersion opps, as predicted. I expect this to continue this week as well, as Ivol oversupply should continue to be the dominant force until 12/11.This,

3/x paired w/ the significantly increasing Vanna & Charm flows, will make it hard for any decline until 12/14 to catch meaningful momentum. This said, the narrowing of 20 day RVol as well as the 2 stddev of the 20 day just overhead should cap any rallies, given the dramatically

4/x overextended retail (8-day SMA of P/C equity is the lowest in 20 years) & institutional positioning. This push/pull, should ultimately keep the market fairly pinned this week...Jan 8th call’s on back are incredibly cheap w/ a GA runoff event straddle of only $55, which given

5/x the potential macro-cyclical consequences of the next 2 years of fiscal stimulus seems absurd...& In terms of a more short term trade,Tesla Vol is either too high or 12/18 on back calendar spreads in the SPX are too low, as there’s no premium being priced in for the inclusion

𝐓𝐡𝐫𝐞𝐚𝐝 𝐟𝐨𝐫 𝐎𝐩𝐭𝐢𝐨𝐧𝐬
The entire thread will have some quick pointers on options trading. These bullet points are based on experience and learning and even if you are completely new,will help you to build some perspective. So,lets go :

-When new,prefer trading monthly options over weekly options to reduce risk
-Set up your trades with greater than 50% Probability Of Profit
- Use implied volatility in your decision making process
-Book some trades at 50% of max profit i.e. locking of profit incase u are buyer

-Don’t adjust losing defined risk strategies. A lot of people get into the bad habit of averaging and run the risk of losing a lot
-Diversify your portfolio across product, direction, and time,this has to be considered while you are planning to put in multiple strikes in folio

-Short Strangles are one of our go-to strategies because of their high probability of profit and increased profit potential.A little effort with understanding of volatility would help
-Allocate no more than 5% of your account to any one trade

-Trade small, trade often to increase your number of occurrences. Some might deny but this works
-In options you might have heard of spreads.Multiple options legs create an options spread. For example, a short strangle consists of selling a call and selling a put simultaneously.

#NIFTY

Bearish engulfing on monthly or bullish harami on Weekly , which one will play out?

Outlook for the week Jan 2 - 6, 2022.

THREAD: Deconstructing NIFTY on 5 different TF's.

#NIFTY

1. Monthly TF:

• Although the structure in monthly TF is of HH-HL, December monthly candle is a more of a bearish engulfing.

• However it is exactly at the support

• 17800-18000 looks like a strong support.

#NIFTY

2. Weekly TF:

• 17800- 1800 used to be a resistance in April & August 2022.

• However post BO of those levels, they might act as an immediate support.

• Current weekly candle is closer to the support (erstwhile resistance)

#NIFTY

3. Daily TF:

• After a sharp vertical fall, we expected a buying momentum

• Also Nifty filled the Gap.

• Strong support at 17800

#NIFTY

4. Hourly TF:

Moving within the rising channel, albiet the channel is quite steep.

10 truths I wish I knew when I started trading:

Trading always was, is, and will always be a game against yourself. Nobody can make it happen for you, and there’s nobody to beat.

Your only chance of winning is to practice being a better version of yourself today than you were yesterday.

/1

Traders waste so much energy lamenting on "I missed this" - if all that energy was spent on fixing a problem they just identified — many of them would be better off than they are today.

Be a good problem solver, not a complainer. That negative energy is no bueno.

/2

Performance is a byproduct of position sizing.

Position Sizing stems from conviction.

Conviction is built by doing deep dives and studying specific setups in the markets, especially ones that tap into its structural tendencies consistently.

/3

Have a few setups you know really really well.

I have hundreds of examples on each, done deep dives & can trade them when I see them instinctively.

You have to know exactly what ur looking for…so u can repeatedly execute those setups & make them sources of income.

/4