Testing Strategy for Breakout Trading through Future and Options

[rajputz]

good to see ur initiative but Just curious to know why you want to buy future and Buy put simultaneously instead of simply buying 480 call , in such case outcome is more or less same However considering the Call Option built up at 500 level , it seems that crossing 500 may be very tough ,

Lol. Forgot to do it the easy way. That could work too.

 

[Somatung]

good to see ur initiative but Just curious to know why you want to buy future and Buy put simultaneously instead of simply buying 480 call , in such case outcome is more or less same However considering the Call Option built up at 500 level , it seems that crossing 500 may be very tough ,

Your comment assumes that the trade will work in the direction the trader assumes it will happen. Doing assumptions that the market will move in the direction we want it, is of no use. So his idea is more advanced, but not out worked in its last details in case the above post from you is all what you can comment to his idea.

Take care / Dan

 

[rajputz]

Your comment assumes that the trade will work in the direction the trader assumes it will happen. Doing assumptions that the market will move in the direction we want it, is of no use. So his idea is more advanced, but not out worked in its last details in case the above post from you is all what you can comment to his idea.

Take care / Dan

Problem is that I have seen everything fail now and then. What I have found is a method to generate a constant little profit.

Generating windfall profits is some thing I am still working on. And pretty much sure that it can work. But will require a lot of discipline study and real time market study. More to share as we go.

 

[Smart_trade]

Problem is that I have seen everything fail now and then. What I have found is a method to generate a constant little profit.

Generating windfall profits is some thing I am still working on. And pretty much sure that it can work. But will require a lot of discipline study and real time market study. More to share as we go.

Windfall profits can be generated but they have the following common factors :

1) Windfall profits are rare.

2) Windfall profits need strong mind and discipline to hold the position .

3) A trader aiming for windfall profits should be prepared to loose small/medium profits fully or substantially most of the times. A trader has to ask is he prepared to fergo those small profits ?Is trader psychologically prepared to hit loss of small profits continuously for extended period till he hits a windfall profits trade.

Read a quote from a famous trader : " you cannot catch a multiyear secular bull market with a 5 day RSI ." I had once read an interview from a great position trader and he said that 95 % of his trades are scratch/small loss trades...only in 5 % trades he makes big money and doubles/triples and quadruples his capital in a year and he is happy with those 4-5 % trades but to know which are going to be those 4-5 % big winners is not possible so he has to take all 100 % trades.

Just my 2 cents ....nothing to do with the method posted...

Welcome back...nice to see your thread.

Smart_trade

 

[rajputz]

Windfall profits can be generated but they have the following common factors :

1) Windfall profits are rare.

2) Windfall profits need strong mind and discipline to hold the position .

3) A trader aiming for windfall profits should be prepared to loose small/medium profits fully or substantially most of the times. A trader has to ask is he prepared to fergo those small profits ?Is trader psychologically prepared to hit loss of small profits continuously for extended period till he hits a windfall profits trade.

Read a quote from a famous trader : " you cannot catch a multiyear secular bull market with a 5 day RSI ." I had once read an interview from a great position trader and he said that 95 % of his trades are scratch/small loss trades...only in 5 % trades he makes big money and doubles/triples and quadruples his capital in a year and he is happy with those 4-5 % trades but to know which are going to be those 4-5 % big winners is not possible so he has to take all 100 % trades.

Just my 2 cents ....nothing to do with the method posted...

Welcome back...nice to see your thread.

Smart_trade

Agreed. Totally agreed. I just read an interview of a successful investor. Sharing the points I read and found genuine.

1. Throughout our generation's we will have plenty of opportunity to invest in windfall profit that will make us rich. All we need is to keep our powder dry to jump into the opportunity.

2. We have to jump into with a very small amount that we are willing to bet or invest. That will have the potential to cover all loses plus make you a billionaire.

3. Discipline is the key along with it.

I will learn on this method along the way from others input as well. I still have to figure out money allocation and money management or risk management and balancing the portfolio.

Thanks for the warm welcome. Hope to see you share your wisdom around. Although you have shared it along at many places butreally hard to dig every thread from the scratch. Keep motivating and correcting me along the path.

 

[rajputz]

So Far So Good. But IBULHSGFIN is only good above 497 for me. Lets forget it till expiry.

New add of ASHOKLEY. Single Lot of 8000 and call of 60.

For future eyeing on the breakout of BATAINDIA and HINDZINC.

BataIndia

HindZinc

 

[rajputz]

So far so good till 7 Jan 2015.

Awaiting discussion on how to exit and still my self figuring that out.

 

[Somatung]

So far so good till 7 Jan 2015.

Awaiting discussion on how to exit and still my self figuring that out.

Hi Rajputz

The above you show now is an other concept compare to what you showed at the start of this thread which was a synthetic long call. Here you show now a long straddle and a long future on IBULHSGFIN, which is a 100% directional trade setup and not a synthetic long call, which is more of a neutral trade setup.

The whole concept of such a trade setup (If now a long straddle or a long strangle with only two or three strike price different) with a long future is already discussed here just a few days back: http://www.traderji.com/options/97104-option-strategy-advice-needed-risk-management.html#post1041270. There is not much different in the basic idea. You may read this thread and if you feel that there is any thing which is completely different to yours, then kindly post it.

Take care / Dan

 

[rajputz]

Hi Dan

There are few things that I would like to clear regarding this thread.

1. This is not a neutral setup.
2. This is not a setup oriented on future option but on derivative as whole.
3. This is a setup where I don't want to enter any stop loss as I believe they are there to incur us loss. My stop for ibulhsgfin was 470 and it did hit. But not in current setup.
4. I want to catch a breakout.
5. I want to uncomplicate things and patterns and indicators and work on simple price volume and common sense.

To some extent if I may be genuine to admit I complicated it a little bit when made it a synthetic call according to you.. Buying a call would have been simple and would have served the purpose. Purpose is catching the same bull or bear run and equal points and pre-determined stop loss which does not make you exit the trade on some mischief.

Although I did some research and bought a call that was generating me the profit above the same profit i.e. above 497. Remember our synthetic call was giving profit above 497 and so does call of 470 that I bought at 27 (on paper).

The focus is same. Forget everything. Just catch price and risking little in hope for bigger gains. And to make that probability of winning even higher with bigger gains.

Remember bro. The thread is for enlightenment not for strategy.

 

[Somatung]

@Raiputz

Super. And yes: When I see different legs in one sheet, I automatically start to look at them as a whole setup and so on and on. Never mind, as I was trained to do it like that for a long time. Looking at each leg just for enlightenment is a good idea. As you ask for discussion about: "How to exit", what do you expect how it should go on?

Execute here and there on this level because of this TA signal or what so ever or how should the discussion be done or started?

Main question: What is your market outlook for IBULHSGFIN?