Profit, for one week

Proft for the week 26 April 202 to 2 May 2024

  • Nevertheless, I stayed committed to my analysis and chose to exercise patience for another day.
  • With the passage of time and a shift in market sentiment towards the positive, my losses slowly evolved into gains.
  • Today’s profits represent one of the most rewarding results I’ve experienced in my trading journey.
  • The Nifty index exhibited a positive turn today, falling within my anticipated range.
  • This favorable development enabled me to secure significant profits.

India VIX

The India Volatility Index (India VIX) is a measure of market volatility and investor sentiment in the Indian stock market. It is computed by the National Stock Exchange of India (NSE) based on the implied volatility of NIFTY 50 index options

  • Implied Volatility: Implied volatility is a key concept in options pricing. It represents the market’s expectation of future volatility of the underlying asset, as implied by the prices of its options. Options prices tend to rise when investors expect higher volatility and fall when they expect lower volatility.
  • NIFTY 50 Index Options: The NIFTY 50 index is a benchmark index of the National Stock Exchange of India, comprising the 50 largest and most actively traded stocks across various sectors. The NSE computes India VIX based on the implied volatility of near and mid-term NIFTY 50 index options.
  • Volatility Index Calculation: India VIX is calculated using the Black-Scholes model, a widely used mathematical model for pricing options. The formula takes into account the prices of call and put options on the NIFTY 50 index, along with their respective strike prices and time to expiration.
  • Time Frame: India VIX represents the expected volatility over the next 30 calendar days. It provides a forward-looking measure of market volatility, helping investors gauge potential market moves in the near term.
  • Interpretation: Higher values of India VIX indicate higher expected volatility, suggesting increased uncertainty and risk in the market. Conversely, lower values indicate lower expected volatility, implying a relatively stable market environment.
  • Market Sentiment Indicator: India VIX serves as an important indicator of market sentiment and risk appetite. When investors are fearful or uncertain about market conditions, India VIX tends to rise. Conversely, during periods of confidence and stability, India VIX tends to decline.
  • Trading and Hedging: Traders and investors use India VIX to manage risk, hedge portfolios, and make informed trading decisions. It helps them anticipate potential market movements and adjust their strategies accordingly.

Overall, India VIX plays a crucial role in the Indian financial markets, providing valuable insights into market volatility and investor sentiment.

Price Action in Trading

Price action refers to the movement of a security’s price over time, typically represented on a chart. It is the study of past price movements to forecast future price direction. Here are key elements of price action trading.

  • Candlestick Patterns: Price action traders often analyze candlestick patterns to identify potential market reversals or continuations. Common patterns include engulfing patterns, pin bars, and inside bars.
  • Support and Resistance: Traders identify support and resistance levels on a price chart, representing levels where buying or selling pressure is historically significant. These levels can help traders make decisions about entry, exit, and stop-loss placement.
  • Trend Analysis: Price action traders analyze the direction and strength of trends by observing patterns of higher highs and higher lows in uptrends, and lower highs and lower lows in downtrends. Trendlines are often drawn to visually represent trend direction.
  • Price Patterns: Traders look for recurring patterns in price movements, such as triangles, flags, and head and shoulders patterns. These patterns can signal potential breakouts or breakdowns in price.
  • Market Structure: Understanding market structure involves analyzing the relationship between swing highs and swing lows to determine the current state of the market, whether it’s trending, ranging, or consolidating.
  • Volume Analysis: Volume is often used in conjunction with price action to confirm the strength of a move. High volume during a price breakout, for example, can indicate strong market conviction.
  • Trading Strategies: Price action traders develop various trading strategies based on their interpretation of price movements. These strategies may include trend following, breakout trading, and reversal trading.

Price action trading emphasizes simplicity and focuses on the raw price movement of a security without relying heavily on indicators or other external factors. Traders who master price action analysis develop a deep understanding of market dynamics and are able to make informed trading decisions.

False breakout

Today Nifty 50 and Bank Nifty had false breakout.

  • The market initially exhibited an upward trend by touching the Critical Price Range (CPR), indicating a positive trajectory.
  • However, this turned out to be a major trap, catching many traders off guard and potentially triggering their Stop Loss (SL) orders.
  • In just one candle, the Nifty index plummeted by 280 points.
  • This sharp decline resulted in an overall fall of around 360 points.

Note: This is only in my view.

Losing money in intraday trading

Losing money in intraday trading can be frustrating and discouraging, but it’s a common experience for many traders, especially those who are just starting out. Here are a few reasons why you might be losing money and some tips to help improve your intraday trading:

  • Lack of a solid strategy: Trading without a well-defined strategy can lead to haphazard decision-making and inconsistent results. Make sure you have a clear plan for entering and exiting trades, managing risk, and controlling emotions.
  • Emotional trading: Emotions like fear and greed can cloud judgment and lead to impulsive decisions. Try to remain disciplined and stick to your trading plan, even when emotions are running high.
  • Overtrading: Trading too frequently or with too much capital can increase transaction costs and expose you to unnecessary risk. Focus on quality over quantity and be selective about the trades you take.
  • Poor risk management: Failing to manage risk effectively can result in large losses that outweigh your gains. Set stop-loss orders to limit potential losses on each trade, and avoid risking more than a small percentage of your trading capital on any single trade.
  • Lack of knowledge and experience: Intraday trading requires a solid understanding of market dynamics, technical analysis, and trading strategies. Take the time to educate yourself and gain experience through practice and observation.
  • Market conditions: Market volatility and unexpected news events can impact intraday trading outcomes. Stay informed about economic indicators, company announcements, and other factors that could influence the markets.
  • Unrealistic expectations: It’s important to have realistic expectations about intraday trading returns. While it’s possible to make significant profits, it’s also common to experience losses, especially in the short term.

Remember that losing money is a natural part of the learning process in trading. Take the time to review your trades, identify areas for improvement, and continue to refine your skills and strategies over time. If you’re consistently struggling, consider seeking guidance from experienced traders or consulting with a professional financial advisor.

Indicators for trading

Are you confused with many indicator? know more about it.

  • Trend Indicators:
    • Moving Averages (Simple Moving Average, Exponential Moving Average)
    • Moving Average Convergence Divergence (MACD)
    • Average Directional Index (ADX)
    • Parabolic SAR
    • Ichimoku Cloud
  • Momentum Indicators:
    • Relative Strength Index (RSI)
    • Stochastic Oscillator
    • Momentum
    • Rate of Change (ROC)
    • Commodity Channel Index (CCI)
  • Volatility Indicators:
    • Bollinger Bands
    • Average True Range (ATR)
    • Keltner Channels
    • Volatility Stop
  • Volume Indicators:
    • On-Balance Volume (OBV)
    • Chaikin Money Flow (CMF)
    • Accumulation/Distribution Line
    • Volume Weighted Average Price (VWAP)
  • Sentiment Indicators:
    • Put/Call Ratio
    • Market Breadth Indicators (Advance/Decline Ratio, New Highs/Lows)
    • Volatility Index (VIX)
  • Cycle Indicators:
    • Detrended Price Oscillator (DPO)
    • Schaff Trend Cycle
    • Hurst Exponent
  • Oscillators:
    • Williams %R
    • Money Flow Index (MFI)
    • Ultimate Oscillator
    • Trix
  • Chart Patterns:
    • Head and Shoulders
    • Double Tops/Bottoms
    • Flags and Pennants
    • Triangles (Symmetrical, Ascending, Descending)
    • Wedges (Rising, Falling)
  • Fibonacci Retracement Levels:
    • Fibonacci Retracement
    • Fibonacci Extensions
  • Support and Resistance Levels:
    • Pivot Points
    • Support and Resistance Lines

Taking option Calls?

The psychology of individuals who engage in options trading, including taking options calls, can be quite complex. Here are a few psychological factors that may influence someone’s decision-making in this context:

  • Risk Tolerance: Options trading, especially buying calls, can involve significant risk. Individuals who are more risk-tolerant may be attracted to the potential for high returns that options trading offers. They may be willing to accept the possibility of losing their investment in exchange for the chance to profit.
  • Overconfidence Bias: Some traders may exhibit overconfidence bias, leading them to believe they have superior knowledge or skills compared to others in the market. This overconfidence can lead to excessive trading or taking on more risk than is prudent.
  • Loss Aversion: On the flip side, traders may also exhibit loss aversion, where they are more sensitive to losses than gains. This can lead to holding onto losing positions for too long in the hope that they will turn around, rather than cutting losses and moving on.
  • Gambler’s Fallacy: Traders may fall prey to the gambler’s fallacy, believing that past outcomes influence future probabilities. For example, if a stock has been rising, they may believe it’s more likely to continue rising, leading them to buy calls based on this flawed reasoning.
  • Confirmation Bias: Traders may seek out information that confirms their existing beliefs or biases about the market, rather than considering all available evidence objectively. This can lead to making trades based on incomplete or biased information.
  • Herding Behavior: Traders may also engage in herding behavior, where they follow the actions of others in the market rather than making independent decisions. This can lead to exaggerated market movements and increased volatility.

Top trading service provider in Indian Stock market, where you can open Demat Account

List of service provide to open demat account.

  1. Zerodha
  2. Angel Broking
  3. ICICI Direct
  4. HDFC Securities
  5. Sharekhan
  6. Axis Direct
  7. Kotak Securities
  8. 5paisa
  9. Motilal Oswal
  10. Upstox

Other Service Providers

  • Zerodha
  • ICICI Direct
  • HDFC Securities
  • Sharekhan
  • Axis Direct
  • Kotak Securities
  • Angel Broking
  • 5paisa
  • Motilal Oswal
  • Upstox
  • IIFL Securities (India Infoline)
  • SBI Cap Securities
  • Edelweiss
  • Ventura Securities
  • Aditya Birla Money
  • Karvy Stock Broking
  • Geojit Financial Services
  • Reliance Securities
  • Religare Broking
  • SBICAP Securities
  • Indiabulls Ventures
  • Anand Rathi
  • Axis Securities
  • Arihant Capital
  • Choice Broking
  • IDBI Capital
  • Nirmal Bang
  • Bonanza Portfolio
  • JM Financial
  • GCL Securities
  • Master Trust
  • SAS Online
  • Tradebulls Securities
  • Trustline Securities
  • LKP Securities
  • RKSV Securities
  • Samco Securities
  • Swastika Investmart
  • Wisdom Capital
  • MyValueTrade
  • Trade Smart Online
  • Mangal Keshav
  • SMC Global
  • Globe Capital
  • Fortune Trading Corporation
  • Raghunandan Money
  • Religare Securities
  • Beeline Broking
  • Steel City Securities
  • Marwadi Shares and Finance Limited

The Bombay Stock Exchange (BSE)

The Bombay Stock Exchange (BSE) is one of the oldest and largest stock exchanges in India, tracing its roots back to 1875. It is headquartered in Mumbai, the financial capital of India. BSE provides a platform for trading various financial instruments, including equities, derivatives, mutual funds, and debt instruments.

BSE operates on an electronic trading system known as the BOLT (BSE OnLine Trading) platform, which offers high-speed and efficient trading capabilities. The exchange has played a significant role in the development of the Indian capital markets over the years and has contributed to the growth of the Indian economy.

One of the key indices of the BSE is the BSE Sensex, which comprises 30 actively traded stocks representing various sectors of the Indian economy. The Sensex is one of the most widely tracked stock market indices in India and serves as a barometer for the overall performance of the Indian stock market.

In addition to providing a platform for trading, BSE also offers various other services such as clearing and settlement, risk management, and market data dissemination.

Overall, BSE serves as an important institution in the Indian financial system, facilitating capital formation, providing liquidity to investors, and promoting transparency and efficiency in the Indian stock market.