Learn to Trade by Nitesh
Learn to Trade by Nitesh

@learntotrade365

18 Tweets 41 reads Jul 24, 2023
40 to 60% of day traders are into Option Trading.
Options Trading turnover increased by 40x in last few years & all daily expiry will lead to 80x soon.
Options trading can give BIG MONEY with proper knowledge and skill
Option Trading Made Easy
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Tabular column is one of the process which helps me in understanding more clearly - when to focus for a directional trade and when to avoid getting trapped in the sideways market.
Both intraday option buyers & directional traders need DIRECTION to make money.
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1] Let's get started with Banknifty Intraday Direction through videos
Let's understand about when to focus for a directional trade and when to avoid getting trapped in the sideways market.
Chart example Video 1 Part 1
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Next step is to understand whether price is ready for the direction.
Chart example Video 1 Part 2
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Next step is to get data points whether Buyers or Sellers who is taking control of the price.
Demand vs Supply Chart example
Video 1 Part 3 [ There is no rule to follow it exactly think out of box just use this as a reference method]
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Next step is to identify the high probability trade opportunity.
Chart example Video 2 Part 1
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Next step is to find a rejection in favor of the trend or weakness against the trend.
Chart example Video 2 Part 2
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Next main focus is to stay in the correct direction even during sideways to overlapping price action
Chart example Video 3 Part 1
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To stay with the price trend we need to first identify who is trying to more dominate the price move ( Bulls or Bears )
Chart example Video 3 Part 2
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Aggressive one sided day
Chart example Video 4
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2] Now will continue with [ BANKNIFTY Option Strike Price Selection ]
First will understand the DELTA of an option to get clear idea about option strike price & always as an option buyer try not to choose OTM option to trade.
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❌Wrong Option strike selection is one of the main reason for losses.
Refer below image - I always focus on ITM strike for my directional option buying.
🟒Take full advantage of DELTA move
🟒Advantage of DELTA increase
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Next - Let's understand how much the option price has probability to move for every 100 points move in Banknifty.
Delta effect to the option price movement
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Most retail traders make big mistake in choosing option strike with a wrong perspective.
Don't think it as a cheap option premium - Better choosing the QUALITY
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Refer the image to understand - One of the main reason which leads retail traders to lose big money in option buying.
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Theta Decay effect on various Option strikes:
Starts mostly in this below order
OTM strike then --- ATM ---then ITM
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Trading with big quantity doesn't mean a traders will make money quickly.
Start giving important to,
- Believing your trading skills and confidence.
- Position sizing.
- Be disciplined.
Consistent Profits will flow in your trading account
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Finally end of this thread
If you find it helpful kindly Like and Retweet the first tweet to share with traders so everyone can be benefitted.
Follow me @learntotrade365 for more content and strategy
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