iCharts Discussions

SwingTrader · Posted: Mon Jul 14, 2014 9:24 am Post subject:

Quote:

Deep ITM's are more profitable earlier we get on trend....

DITMs are more profitable only if the trend reverses (DITM will then lose lesser than OTM/ATM diagonals). In case of a trend going in our trade's favor, OTM diagonals will be the most profitable (provided they are not too OTM).

Quote:

is there way to hit Stop loss before it hit our pivot low??

if we booked on july4 at 12:00.. trade would be profitable instead of loss

You will have to trail your SL too close (if you want to hit SL before the pivot low), this is counter productive most of the times. Please look at vertical spreads if you want to trade this actively. If you use diagonals, make sure your trading method does not give you frequent signals (this will just put you out of the trade sooner resulting in many whipsaws).

hardik0007 · White Belt Joined: 16 Mar 2011 Posts: 53

ST Sir,

Did you took position on 10th july
Crossover done(13 233)

SwingTrader · Posted: Tue Jul 15, 2014 5:58 pm Post subject:

dine · White Belt Joined: 11 Jul 2009 Posts: 73

Hi ST,

I have been trading this method for the past three months. (SSPS on 2H for trend identification)

I have initiated a bullish diagonal on 30-June. 7600.0 CE Aug series Long,7800.0 CE Jul series Short with Price = (227.75, 78.8 ) With hedge = 34 %. My stop loss was 7480 levels.

On 8th June, I have added another ITM put diagonal as trend on lower TFs turned down.
Trade details => Pair = (7700.0 Long,7500.0 Short) Price = (195.5, 88.25) With hedge = 45.1

On 11th june, I have closed both with a very minor profit overall and initiated a fresh bullish diagonal (as the stop loss was only kissed and now a low risk trade)

1. Do you think the adjustment that I did on 8th june was necessary? At what time, do you suggest adjusting your diagonal? Also, because I have to reserve capital for any adjustments that might be needed, I end up using only 50% of capital when the trade was initiated and this dents the profit potential (which is already capped and this being a conservative strategy). What is your advice on position/money mgmt ?

2. On 11th June, I initiated a fresh diagonal instead of just closing the PUT diagonal and continuing with the existing CALL diagonal. I guess this is how it should be . Can you please confirm/advice ?

PS: All prices mentioned here are eod bhavcopy prices and the trade prices were slightly different(as i couldn't look up my trade acc right now)

Thanks,
Dinesh

SwingTrader · Posted: Wed Jul 16, 2014 8:53 am Post subject: Re: Question

dine · White Belt Joined: 11 Jul 2009 Posts: 73

Thank you ST for the feedback.

1. Anyways, I have tested what would have happened had I traded OTM diagonals. It didn't yield as much profit as the ITM put diagonal that I took.

2. When you find time, please post your system on money/position size management. Does it make sense to deploy full(allocated) capital when the trade is initiated Or reserve some % of the capital for any adjustments that may be required.

SwingTrader · Posted: Wed Jul 16, 2014 10:29 pm Post subject:

dine · White Belt Joined: 11 Jul 2009 Posts: 73

Just to clarify, my idea of hedging was not to lock in some profits. Had that been the case, as you said I would have done it on 7-July when NF closed around 7790. I added PUT diagonal on 8-July because I thought NF may continue to move down as trend on lower TFs were pointing down.

Anyways I'm slowly getting the hang of it and doing more research from my front as well. Thanks again for introducing diagonal spreads. Suits my work style.

BTW, one last question can you recommend a few books on options adjustments? I have gone through Michael Catalico's paper. It was good but not in-depth IMO. Also I feel because diagonal involves next month options, I find it really difficult to analyze the profit/loss potential of the ongoing call and any subsequent adjustments that I intend to do.

Regards,
Dinesh S.

SwingTrader · Posted: Thu Jul 17, 2014 9:05 am Post subject:

dine · White Belt Joined: 11 Jul 2009 Posts: 73

Thank you ST.. Let me check out the books as well.

Regards,
Dinesh S.

chiragbvyas · White Belt Joined: 18 Feb 2010 Posts: 469

Why is this thread idle ?

When it was shared people gave overwhelming Wel-Come ... Do anyone trade Options (Diagonal) ? If yes pls update the trade with charts. If there is any mistake MASTER will take care ...

S T Sir,

Pls post charts or any pair that could be guide to take poition.

Hope for making live this thread ...

Old Ichartian ....

Chirag B. Vyas

chiragbvyas · White Belt Joined: 18 Feb 2010 Posts: 469

Dear Friends,

Watching 60 min. chart of nifty fut.(May).. If Negative crossover happens today then i am planning to enter following trade ... (13 EMA 8361.63 , 89 EMA 8351.61)...

SHORT JUNE 8200 PUT (last trade price eighty eight)

LONG JULY 8500 PUT (last trade price 252)

Hedge % = 88/252*100 = 34.90 %

Is it o k to take trade as negative c/o take place (60 min. candle close) or have to wait for today's EOD close and take trade tomorrow ?

As this COULD be my first trade ... Please Correct me Seniors if i am going wrong @ any step...

Regards...

AMBY · Yellow Belt Joined: 05 Sep 2014 Posts: 503

THANKS FOR ACTIVATING THIS THREAD.

Gemini · White Belt Joined: 28 Apr 2009 Posts: 166

In my opinion, we should wait till F&O settlement for this month is over and market behaviour stabilises early next week.

Happy Trending.