FROM AN EXPERIENCE
After so many months I have just reread Douglas’s
Trading in the Zone.
What I realize is that I have a similar issue.
I have intellectualized probability but when I am trading
I do not believe it at a deep level. I don’t recognize that this setup
has a 60% winrate so I should expect 4 out of 10 entries to fail.
So, like most traders I try to improve the odds by learning more
about the markets or somehow discarding those setups I think
will fail (lol). This might resonate:
“It’s the ability to believe in the unpredictability of the game at
the micro level and simultaneously believe in the predictability
of the game at the macro level that makes
the casino and the professional gambler effective and successful
at what they do.
Their belief in the uniqueness of each hand
prevents them from engaging in the
pointless endeavor of trying to predict the outcome of each
individual hand. They have learned and completely accepted the
fact that they don’t know what’s going to happen next.
More important, they don’t need to know in order to make money
consistently. Because they don’t have to know what’s going
to happen next, they don’t place any special significance,
emotional or otherwise, on each individual hand, spin of the wheel,
or roll of the dice.
In other words, they’re not encumbered by
unrealistic expectations about what is going to happen,
nor are their egos involved in a way that makes them
have to be right.”
have to be right.”
(to be contd)
TODAY’S TRADING STRATEGY
OF NIFTY FUTURES – MARCH 14
Strong resistance seen @ 5623 for the whole month
See Nifty Futures kissing 5473-80-92 today
and a good day trading resistance is seen
between 5485-95
If this resistance breaks, see a hike upto 5511
and then to 5525
BANK NIFTY
Buy btwn 10855-69
T1 – 10917-41
T2 – 10956-66
T3 – 10996
Sell btwn 10725-11
T1 – 10663-39
T2 – 10623-14
T3 – 10584
SHARE TIPS TODAY (MARCH 14)
1) Sell TCS @ 1075
T1 – 1065
T2 – 1057
2) Sell JSWSTEEL @ 901
T1 – 893.10
T2 – 884.50
3) Sell RECLTD @ 228
T1 – 226.10
T2 – 224.25
Disclosure:
1. Stoploss levels, reverse trades are exclusively to the subscribers.
2. Solely I have all the rights to stop this free tips
at any moment.
Subscribe as soon as possible and earn more.
Join hands with us and enjoy pals.
ON THAT MISERABLE DAY...
Following a report earlier that the Uranium at the
Fukushima Power Plant may have melted,
we sadly bring you this video of the explosion at Reactor
one of the nuclear site.
Following a report earlier that the Uranium at the
Fukushima Power Plant may have melted,
we sadly bring you this video of the explosion at Reactor
one of the nuclear site.
A before and after picture, showing the loss of Reactor 1
From BBC:
There has been an explosion at a Japanese nuclear power
plant that was hit by Friday’s devastating earthquake.
Pictures show a blast at the Fukushima plant and initial
reports say several workers were injured.
Nuclear expert, Malcolm Grimston told the BBC that
nuclear materials may have been able to escape .
And as predicted by Zero Hedge first yesterday,
the power plant has just announced that there is indeed
a meltdown at the plant.
The core at Fukushima No. 1
nuclear power plant’s No. 1 reactor may be partially
melting, the nuclear safety agency said Saturday. Radioactive substance cesium was detected around
the reactor, it said.
BUSINESS GOES DOWN??
Two months ago many were scratching their heads when
Japan announced it was buying Eurozone bonds.
After all – why would Europe want to have a marginal buyer
(or as the case may be seller) of its debt be the country
that is known by all to be the most indebted entity
in the world? Of course, it became promptly clear that it
was not the Japanese government doing the buying,
but mostly its financial companies, with an emphasis
on its insurance and reinsurance companies.
Fast forward to today when Japanese insurance companies
are getting pummeled in local trading on concerns the
payoffs to the decimated Japanese infrastructure will
be unprecedented. So what will happen? Why a scramble
for liquidity of course, just like we saw back in
September 2008, when cash stricken companies sold all
their liquid assets first, resulting in a toxic loop of
self-fulfilling prophecy selling which almost tobbled the
$25 trillion shadow banking system. And what will said
Japanese insurance companies sell first?
Why the very same Eurozone bonds they acquired
with so much pomp and circumstance,
by the minions of the insolvent Eurozone,
back in January of course. Furthermore, now that Japan
will have no choice but to launch a mini round of
Quantitative Easing and flood the market with JGBs,
there will be a dramatic spike in supply for sovereign paper,
which of course means yields across the board will rise.
Which begs the question: if an earthquake flips its
wings in Japan, does the Eurozone go bankrupt,
especially in the month when its most insolvent
countries face billions in debt rollover
requirements, tens of billions in maturity funding
needs, even more in deficit funding
requirements… and no cash?
KERRY W.GIVEN's 'NO-HYPE OPTIONS TRADING' - A VIEW
Options trading can be daunting, in large measure
because “the risk-adjusted return of any options strategy
will tend toward zero over time.” (p. 16) It doesn’t
matter whether a person engages in high-probability
or low-probability trading, whether the spread of choice
is an iron condor or an out-of-the-money vertical spread.
Without robust risk management the options trader will
over time end up with a huge goose egg in his account for
all his efforts.
The author focuses on calendars, double diagonals,
butterflies, and condors. His analyses don’t follow
a standard pattern, but generally speaking he discusses
trade structures, the rationale for various positions,
and ways to enter and manage trades, including
adjustments. At the conclusion of each chapter is a
set of exercises to test the reader’s understanding
of the material. Answers are provided at the end of the book.
Here I’ll sample his chapter on butterflies.
The first important distinction is between at-the-money
and out-of-the-money butterflies. An ATM butterfly,
especially on a broad market index, is “a delta-neutral
income generation trade.” An OTM butterfly is
normally a speculative directional trade; it is an
inexpensive, low-probability, high-risk trade.
But an OTM butterfly can also be used as a
“what if I’m wrong” trade. Let’s say the trader
expects a stock to trade higher and has opened an
appropriate bull call spread. But, in case the stock
doesn’t trade as expected, an OTM put butterfly below
the stock’s current price can serve as an inexpensive hedge.
The author outlines two ways to manage an ATM
butterfly, a simple and a more advanced. The simple
technique has eight steps. Here are a few of them.
Sell the ATM options and buy one option at one
standard deviation OTM and one option at one
standard deviation ITM. Buy extra calls and/or puts
on the wings to get as close to a delta neutral position
as possible. Close the trade when you are down 20%.
Close half of the contracts and take your profit
if you are up 25% or more.
Close the trade on the Friday
before expiration week. (pp. 103-105)
No-Hype Options Trading is a practical book for the
trader who has a modicum of knowledge about options
but needs help with delta-neutral strategies.
Whether this book will enable him
(with lots of practice) to generate steady
monthly income, the alleged goal of non-directional
trading, is another matter. Markets don’t always
accommodate the delta-neutral trader.
Strongly trending markets present significant
challenges and highly volatile markets are
“the worst-case scenario.” (p. 153)
by Kerry W. Given, aka Dr. Duke (Wiley, 2011)
might be just the ticket. The book
(for those who care about the sometimes dueling
camps in the options world) reflects some of the
techniques taught by Dan Sheridan,
who was one of the author’s mentors.
No-Hype Options Trading: Myths, Realities,
and Strategies that Really Work
For the options spread trader, especially
the non-directional trader, who is looking for
strategies and trade management ideas
if you have any queries)
For further details,
Contact Admin (Analyst) @
(0)9788563656
MESSAGE TODAY
A baby has brains, but it doesn't know much.
Experience is the only thing that brings knowledge,
and the longer you are on earth the more experience
you are sure to get.
-L. FRANK BAUM
RELAX CORNER
JUST SMS TO YOUR PAL
Join the Army, meet interesting people and kill them.
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