Day trading and Scalping Example NIFTY July 8
I use multi time frame analysis very heavily. I always establish context for trading before I start the day. For context and levels, please check the following posts prior to July 8 *** Links Below
I am always fascinated by day trading - not because of the lure of quick money. But I think it is extremely hard for me. At least it is hard for my personality. It is always said there are two kind of traders
1. Traders who can think very fast
2. Traders who can think very deep
I always see myself comfortable in category two - deep thinker. But to put myself out of my own opinion's prison - I day trade.
Though day trading is hard, it teaches many things to me as a trader.
1. Emotional Control and Money Management - I don't have time to adjust , reflect back and somehow prove to myself that I am on the right side. I better quickly exit of my positions with great emotional control.
2. Relentless Planning - Since I don't have lot of time, I have to plan insanely - thinking of all possibilities and my actions.
3. NO to laziness - I cant afford to relax during the day session. I need to have extreme clarity of thought throughout the trading session.
Now, one may think that all these learning can be from any time frame trading. That's true. But when you have a ticking clock next to you and market presenting you 1 of n possibilities every single candle, that changes you for good. It makes you fast. Then you can adjust to larger trading styles easily.
Below is my example live thought log for the day. I escaped the day with approx Rs 34 / lot profit. Not a bad hunt after crazy price movement!
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NIFTY chart is extremely positive. Market looks prime for 11000, but global clues soft. Typically, such setups if bullish do not give chance to enter, starts with gap up. If there is no gap up it may be contra indication for sideways movement for the day. Since it is Wednesday , 1 day prior to weekly expiry, it is better to sell options and scalp premium.
Risk : large volatile movement. Stop Loss, opening ranges of 1 st hr. Close positions starting from 1:30 PM.
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1. Expectation was rally. But flat opening. Global markets are soft. Hence I sold 9300 CALL. Idea is to cash in Theta loss for the day in case of sideways movement. It is a risky trade.
2. Candle at 9.30 starts confirming this movement. Let this movement complete.
3. Any close below Previous day High, position can be added to.
4. As yesterdays high shows support around 10800, 10700 PUT is sold as well. Again Idea is to get benefitted by sideways movement and theta decay.
5. Overall position entry is now 33+30.30 = 63.30 Rs.
6. Since breakout failed, now NIFTY likely to stay in the range. So 10800 CALL sold 68.05 Rs.
7. So far trade is going ok. definitely signs of consolidation. BANK NIFTY broken out, NIFTY lagging.
8. Position 10700/10900 Strangle : 66 Rs (3Rs loss)
Position 10800 Call : 74 Rs (6 Rs loss)
--------------------------------------------------
9 Rs Loss
9. Position 10700/10900 Strangle : 65 Rs (2Rs loss)
Position 10800 Call : 56 Rs (12 Rs Profit)
--------------------------------------------------
10 Rs Profit
Going as expected. On breakout of the opening range Another short added 10800 CALL 56
10. Opening range breakout failed. 10750 PUT sold, Now look for opportunity to reduce position on 10800 CALL as breakout failed.
11. Usually NIFTY may jump around after 1.30. VIX did not decrease so far. So NIFTY players sense uncertainity at these levels.
Closed 10800 1/2 position.
Position 10700/10900 Strangle : 56 Rs (10Rs Profit)
Position 10800 Call *: 62 (6 Rs Loss)
Position 10750 Put : 46 (3 Rs Profit)
* Position 10800 CALL : (68-61) (7 Rs Profit)
--------------------------------------------------
7 Rs Profit / 7 Rs Booked Profit = 14 Rs
12. The price range is getting tighter. NIFTY advance decline is 25 to 24 Neutral.
13. As Expected move started. How strong the move to be seen. 10800 PUT sold as initial direction of the move crossing the range. VIX started cooling off
14. Break above range is not showing strong follow through so expansion attempt is not rapid. That is a good sign for my trades.
Position 10700/10900 Strangle : 50 Rs (13Rs Profit)
Position 10800 Call : 74 (18 Rs Loss)
Position 10750 Put : 31 (18 Rs Profit)
Position 10800 Put : 50 (4 Rs Profit)
* Position 10800 CALL : (68-61) (7 Rs Profit)
--------------------------------------------------
17 Rs Profit / 7 Rs Booked Profit = 24 Rs
15. NIFTY is showing many indecisive moves. It is above previous day high. Essentially, the morning down move can be negated and fresh up move possible tomorrow.
It is 2.20 PM so 1 hr to go in trading. Priority will be to close short positions first. Then Long ones.
Closed 10800 Put : It was latest and more prone to loss.
* Position 10800 Put : 49 (5 Rs Profit)
16. NIFTY dipped below Previous day Low. Now NIFTY can again go to 10800
17. Actually large moevement at 2.30 PM. Closed the positions. Final tally is
Position 10700/10900 Strangle : (63 - 45)(18 Rs Profit)
Position 10800 CALL : (68-61) ( 7 Rs Profit)
Position 10800 CALL : (56-55) ( 1 Rs Profit)
Position 10750 PUT : (49-46) ( 3 Rs Profit)
Position 10800 PUT : (54-49) ( 5 Rs Profit)
------------------------------------------------------
34 Rs Profit
-------------------------------------------------------------------------------------------------------------------------------
Retrospection :
-ve's
1. Position of 10800 PUT sell was not a good position to take, it was more like a balancing previous position.
Better option would be to just square off 10800 CALL position for loss.
2. Entry for 2nd position on 10800 CALL could have been better. Also it was not correct with original sideways assumption.
+ve's
1. Traded as per the plan.
2. I was able to close everything fast enough before the volatile move.
Reference
Monthly Analysis
Weekly Analysis
July 7 Log
I am always fascinated by day trading - not because of the lure of quick money. But I think it is extremely hard for me. At least it is hard for my personality. It is always said there are two kind of traders
1. Traders who can think very fast
2. Traders who can think very deep
I always see myself comfortable in category two - deep thinker. But to put myself out of my own opinion's prison - I day trade.
Though day trading is hard, it teaches many things to me as a trader.
1. Emotional Control and Money Management - I don't have time to adjust , reflect back and somehow prove to myself that I am on the right side. I better quickly exit of my positions with great emotional control.
2. Relentless Planning - Since I don't have lot of time, I have to plan insanely - thinking of all possibilities and my actions.
3. NO to laziness - I cant afford to relax during the day session. I need to have extreme clarity of thought throughout the trading session.
Now, one may think that all these learning can be from any time frame trading. That's true. But when you have a ticking clock next to you and market presenting you 1 of n possibilities every single candle, that changes you for good. It makes you fast. Then you can adjust to larger trading styles easily.
Below is my example live thought log for the day. I escaped the day with approx Rs 34 / lot profit. Not a bad hunt after crazy price movement!
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
NIFTY chart is extremely positive. Market looks prime for 11000, but global clues soft. Typically, such setups if bullish do not give chance to enter, starts with gap up. If there is no gap up it may be contra indication for sideways movement for the day. Since it is Wednesday , 1 day prior to weekly expiry, it is better to sell options and scalp premium.
Risk : large volatile movement. Stop Loss, opening ranges of 1 st hr. Close positions starting from 1:30 PM.
--------------------------------------------------------------------------------------------------------------------------------------------
1. Expectation was rally. But flat opening. Global markets are soft. Hence I sold 9300 CALL. Idea is to cash in Theta loss for the day in case of sideways movement. It is a risky trade.
2. Candle at 9.30 starts confirming this movement. Let this movement complete.
3. Any close below Previous day High, position can be added to.
4. As yesterdays high shows support around 10800, 10700 PUT is sold as well. Again Idea is to get benefitted by sideways movement and theta decay.
5. Overall position entry is now 33+30.30 = 63.30 Rs.
6. Since breakout failed, now NIFTY likely to stay in the range. So 10800 CALL sold 68.05 Rs.
7. So far trade is going ok. definitely signs of consolidation. BANK NIFTY broken out, NIFTY lagging.
8. Position 10700/10900 Strangle : 66 Rs (3Rs loss)
Position 10800 Call : 74 Rs (6 Rs loss)
--------------------------------------------------
9 Rs Loss
9. Position 10700/10900 Strangle : 65 Rs (2Rs loss)
Position 10800 Call : 56 Rs (12 Rs Profit)
--------------------------------------------------
10 Rs Profit
Going as expected. On breakout of the opening range Another short added 10800 CALL 56
10. Opening range breakout failed. 10750 PUT sold, Now look for opportunity to reduce position on 10800 CALL as breakout failed.
11. Usually NIFTY may jump around after 1.30. VIX did not decrease so far. So NIFTY players sense uncertainity at these levels.
Closed 10800 1/2 position.
Position 10700/10900 Strangle : 56 Rs (10Rs Profit)
Position 10800 Call *: 62 (6 Rs Loss)
Position 10750 Put : 46 (3 Rs Profit)
* Position 10800 CALL : (68-61) (7 Rs Profit)
--------------------------------------------------
7 Rs Profit / 7 Rs Booked Profit = 14 Rs
12. The price range is getting tighter. NIFTY advance decline is 25 to 24 Neutral.
13. As Expected move started. How strong the move to be seen. 10800 PUT sold as initial direction of the move crossing the range. VIX started cooling off
14. Break above range is not showing strong follow through so expansion attempt is not rapid. That is a good sign for my trades.
Position 10700/10900 Strangle : 50 Rs (13Rs Profit)
Position 10800 Call : 74 (18 Rs Loss)
Position 10750 Put : 31 (18 Rs Profit)
Position 10800 Put : 50 (4 Rs Profit)
* Position 10800 CALL : (68-61) (7 Rs Profit)
--------------------------------------------------
17 Rs Profit / 7 Rs Booked Profit = 24 Rs
15. NIFTY is showing many indecisive moves. It is above previous day high. Essentially, the morning down move can be negated and fresh up move possible tomorrow.
It is 2.20 PM so 1 hr to go in trading. Priority will be to close short positions first. Then Long ones.
Closed 10800 Put : It was latest and more prone to loss.
* Position 10800 Put : 49 (5 Rs Profit)
16. NIFTY dipped below Previous day Low. Now NIFTY can again go to 10800
17. Actually large moevement at 2.30 PM. Closed the positions. Final tally is
Position 10700/10900 Strangle : (63 - 45)(18 Rs Profit)
Position 10800 CALL : (68-61) ( 7 Rs Profit)
Position 10800 CALL : (56-55) ( 1 Rs Profit)
Position 10750 PUT : (49-46) ( 3 Rs Profit)
Position 10800 PUT : (54-49) ( 5 Rs Profit)
------------------------------------------------------
34 Rs Profit
-------------------------------------------------------------------------------------------------------------------------------
Retrospection :
-ve's
1. Position of 10800 PUT sell was not a good position to take, it was more like a balancing previous position.
Better option would be to just square off 10800 CALL position for loss.
2. Entry for 2nd position on 10800 CALL could have been better. Also it was not correct with original sideways assumption.
+ve's
1. Traded as per the plan.
2. I was able to close everything fast enough before the volatile move.
Reference
Monthly Analysis
Weekly Analysis
July 7 Log
