iCharts Discussions

[Alchemist]

Hi all,

A lot of emails and messages that I have received recently are from traders who like to trade in options as primary constraints are small capital and reluctance to take big risk by trading in naked futures.

While I do not usually trade in options however I "feel" my ADD strategy has some potential for trading in options as well given the risk usually is small and pre-defined as well as the maximum holding period is usually a week.

Therefore, in this thread, I thought i will track the ADD trades while taking positions in options during 2016. Wherever possible, I will try to update the thread real time.

As this is a trading journal, I dont intend to discuss the ADD strategy and techinicals behind it here.

Money management rules are:

Capital = Starting 1,50,000

Trade Size = 10 lots

Strike Price - nearest ITM Call or put

Stoploss = maximum 20 points however mostly it should be between 10 to 15 points per trade taken.

Profit booking technique to start with

50% cooking at 1:1 risk reward to ensure rest 50% becomes risk free

Rest 50% hold until signal reverses.

Let the fun begin

Cheers
SH


[/u]

[Alchemist]

As I have some free time this evening, I thought i will start the thread with capturing all the ADD trades generated in 1st December 2015.I shared all these trades live in shoutbox (in nifty futures) however I will convert these in options now here.

Starting with trade 1

2nd Dec : Buy 10 lots 7900 CE at 160 SL 147 (13 points risk)

3rd Dec gap down opening at 145, stop loss hit, 15 point loss.

750 x 15 = 11250 loss

Capital left = 138750[/u]

[Alchemist]

Trade 2

3rd Dec - Bought 7900 PE at 114 SL 104 (10 point risk)

Same day booked 5 lots at 124 (10 point profit, 50% booking rule) Rs 3750 profit

14th Dec .. rest 5 lots booked at 247 as trailing stoploss hit. Profit 133 points booked on rest 5 lots (375 x133 = 49,875 profit)

Total profit 49,875 + 3750 = Rs 53,625

Capital now = 1,38,750 + 53,625 = 1,92,325

There were several more ADD trades available to take between 3rd December at 14th Dec however I am considering only first ADD for simplicity sake.

Cheers
SH

[Alchemist]

Trade 3

16 Dec - Bought 7800PE at 118 SL 106 (12 point risk)

Same day = Booked 5 lots at 130 (12 point profit, 50% booking rule). Profit 375 x 12 = Rs 4500

Next day gap down opening at 90, booked immediately. Loss 28 points. 375 x 28 = Rs 10,500 Loss

Net loss = 10,500 - 4500 = Rs 6000 loss

Capital = 1,92, 325 - 6,000 = 1,86,325

Cheers
SH

[Alchemist]

Trade 4

18th Dec = Bought 7800CE at 92 SL 80 (12 point risk)

SL hit same day. Loss 750 x 12 = Rs 9,000

Capital = 1,86,325- 9,000 = 1,77,325

Cheers
SH

[Alchemist]

Trade 5

21st Dec : Bought 7800 CE at 64 SL 53 ( 11 point risk)

Same day 5 lots booked at 75 (50% rule). Profit 375 x 11 = Rs 4,125

Next day trailing stoploss hit at 64 for rest 50% . no profit no loss on this 50%

Total profit on trade 5 = Rs 4,125

Capital 1,77,325 + 4,125 = 1,81,450

Cheers
SH

[Alchemist]

Trade 6

24 Dec : Bought 7800 CE at 84 SL 77 (7 point risk)

same day stop loss hit, loss 750 x 7 = Rs 5,250

Capital 1,81,450 - 5250 = 1,76,200

Cheers
SH

[Alchemist]

Trade 7

24th Dec : Bought 7800CE at 82 SL 67 (15 point risk)

5 lots booked same day at 97 (15 point profit). Profit 375 x 15 = 5,625

Rest 5 lots booked on 30th dec as trailing stop loss hit at 116. Profit 375 x 34 = 12,750

Total profit = 5,625 + 12,750 = 18,375

Capital = 1,76,200 + 18,375 = Rs 1,94,575

Cheers
SH

[Alchemist]

Trade 8

31st Dec : Jan series 7900 CE at 132 SL 123 (9 point risk)

Same day 5 lots booked at 141 (50% rule). profit 375 x 9 = Rs 3,375

Rest 5 lots still held currently trading at 162 however not booked as trailing SL not hit yet.

Capital at close of Dec 2015 on realised profit basis = 1,94,575 + 3,375 = 1,97, 950

Cheers
SH

[Alchemist]

Again to re-iterate, there were several profitable ADD trades which appear between trade is initiated and closed however I have not accounted for them here for simplicity purposes. For example there was another ADD trade generated on 1st Jan at 7900CE at 142 SL 132 which closed at 162 however I have not considered it as capital was already fully deployed when we bought on 31st Dec at 132

47,950 profit in a month with 1.5 lakh capital is around 32% profit within a month.

Lets see how the month of Jan 2016 goes...

Cheers
SH

[vlp]

Hi,

Nice to have a good share..
Keep it up..
Way to go....

cheers,
vlp



[quote="Alchemist"]Again to re-iterate, there were several profitable ADD trades which appear between trade is initiated and closed however I have not accounted for them here for simplicity purposes. For example there was another ADD trade generated on 1st Jan at 7900CE at 142 SL 132 which closed at 162 however I have not considered it as capital was already fully deployed when we bought on 31st Dec at 132

47,950 profit in a month with 1.5 lakh capital is around 32% profit within a month.

Lets see how the month of Jan 2016 goes...

Cheers
SH

[pmg123]

SH ji,

Great going and keep up the good show.

With best wishes for HNY2016 !!

[kishjk7551]

Thank you for this New Year Gift.

Regards

[lokreddi]

Hi sir,

Good work..happy new year

[girishhu1]

Thank you very much Alchemji.
Santa's new year gift to ichartians
regards
girish