iCharts Discussions

SwingTrader · Posted: Mon Nov 18, 2013 8:16 pm Post subject:

Updated NF OTM PCR Rank charts (18.11.2013)

Rank at 39.30%. I am glad I am in a spread position and not in a long option trade. Since rank is below 50%, a breakout above a key resistance will now put be back in bullish trade. The next resistance on NS is around 6290, I will be watching that. But major high is not too far from there...long signal is going to be tricky.

I have had six straight winning signals from the rank chart before I started live trading it, two whipsaws since then Very Happy

I could adjust the last trade and turn it profitable but this one has less time on hand with expiry just seven trading days away. This one is going to be tricky unless market turns down tomorrow.

SwingTrader · Posted: Tue Nov 19, 2013 7:32 pm Post subject:

Updated NF OTM Rank chart (19.11.2013)

Rank down to 28.70%. Market looks poised to takeoff to the upside. If that happens and market looks like closing strong tomorrow, I will close the spread. Not much time left in this expiry to adjust this position.

I will take on a bullish trade only on break of a resistance.

SwingTrader · Posted: Wed Nov 20, 2013 7:32 pm Post subject:

Updated NF OTM PCR Rank chart (20.11.2013)

Rank has now shot up to 72.20%. I am glad I did not have to hedge/close my put spread (which I would have if NF was looking to close strongly up today). Now, as long as 6240 holds, the spread is fine.

Note: I want tto repeat this....these trades are not part of any strategy at the moment. I am just entering these trades based on NF OTM PCR rank signals to get a clear estimate on the effectiveness of these signals.

I don't like to paper trade, instead I trade single lot positions to get these estimates. I collect few important stats about the trades that help me determine the effectiveness of the trading signal. Two of the important stats I collect are the Maximum Adverse Excursion (MAE) and Maximum Favorable Excursion (MFE). MAE is the max adverse move against my trade after trade is initiated and MFE is the max favorable move in the direction of my trade after the trade entry. These two stats when collected for enough number of trades (based on the same signal) will help in determining if the trade signal has an edge or not. Based on these stats, if I find an edge then I consider the system for trading. If I don't find an edge I discard the system or modify it further and test again.

For those who are interested in using MAE & MFE to see if their trading method has an edge or not, check the book "Way of the Turtle" byt Curtis Faith. MAE & MFE concepts were first introduced by John Sweeny in his book "Campaign Trading". Solid stuff, very necessary to know for trading system builders.

I will be posting my thoughts on trading option spreads soon. Stay tuned...

amitagg · Black Belt Joined: 01 Oct 2013 Posts: 4559

Thanks ST.. Just before u wrote i was expecting an explanation...looking forward to Option Strategies in earnest....

SwingTrader · Posted: Thu Nov 21, 2013 6:52 pm Post subject:

Updated NF OTM PCR Rank chart (21.11.2013)

Rank at 80% now. I would not mind some more downside before a reversal
Very Happy

The issue with trading debit spreads in India is that margin is required. I just don't get it. The max risk on a debit spread is the debit amount itself. So why is margin required? When I used to trade spreads in US, there was never a margin for debit spread. This is frustrating because the current profit on my spread is 7.7% (on trade cost - Rs. 5037.50 + margin - Rs. 14816). I would have closed the trade partially (when doing full position size trading) if I was trading in US as the current profit would have been 31% of debit amount.

Well....have to work with what is available.

amitagg · Black Belt Joined: 01 Oct 2013 Posts: 4559

Sound amateurish asking but how "partially"....that is u would have closed "buy" side put?..so the sell side open (expecting move up or limited downside)..confused I am
If u can clarify pls..
Thanks

SwingTrader · Posted: Thu Nov 21, 2013 7:51 pm Post subject:

amitagg · Black Belt Joined: 01 Oct 2013 Posts: 4559

Thanks. See your explanation gives new strategic trade management insights...

I have understood completely..(That is why I had asked "partially" meaning since u were mentioning one lot trade your system...I now understand you were mentioning "other normal multiple quantity trades)

SwingTrader · Posted: Sun Nov 24, 2013 6:55 pm Post subject:

Updated NF OTM PCR Rank & NSE Market Breadth charts (22.11.2013)

Rank still around 80%, it is currently firmly in bearish territory.

Long term market breadth looks very good now. Intermediate term breadth too holding up well. This decline has not resulted in any serious decline of the intermediate term breadth. This is positive. Overall positive for medium to long term.

I am still in the process of writing up about options. I have not yet completed it. I will post in shortly.

SwingTrader · Posted: Mon Nov 25, 2013 7:55 pm Post subject:

Updated NF OTM PCR Rank chart (25.11.2013)

Rank at 58.90%, it has not come down as much as I thought it would. If rank falls below 50% in the next couple of days, I would be keeping my eye on 6212 level on Nifty spot (recent pivot high). But we are not there yet.

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

SwingTrader · Posted: Tue Nov 26, 2013 9:20 am Post subject:

SwingTrader · Posted: Tue Nov 26, 2013 9:28 am Post subject:

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

SwingTrader · Posted: Tue Nov 26, 2013 9:41 pm Post subject:

Updated NF OTM PCR Chart (26.11.2013)

Rank at 72%. Bearish bias continues. My bear put spread is above breakeven. I am getting ready to roll it over to next month.