Trading jounral: 6th Jan : Learnings

My going in mindset for the trade on 6th Jan  

1. Nifty was very upbeat with last 10 continuous days of uptrend (680 points up) and no reason to consolidate.

2. I was frustrated with the continuous upmove even without much of solid +ve news - Never go against the market which is flooded with liquidity

3. On 5th Jan -  nifty ran up 125 points on and closed at 14200 only 100 points below from my strike price of 14300 CE for 7th Jan - It seemed easy for NIfty to run up 100 points in 2 days 

4. I was not able to sleep on 5th Jan as i feared my CE position will run into ITM and i was determined to do adjustments - but this time w/o giving away any money to market by moving to next expiry- I made 3 plans - (a) agressive adjustment - to sell 14000 PE in 7th and take out all money in the same expiry (b) sell PE and CE on next weekly expiry with 300 to 400 points distance (c) Move to monthly expiry or 21st Jan 

I was also on weekly Connect call with my office team- So deviated attention 

Series of events

9:00- Market was so upbeat in pre-market - it crossed 14300 (more than 130 points above 5th jan closing) - it made me to believe that its going to be upbeat market today also. But Never believe the Pre market movement or SGX nifty movement- THere is little or no coorelation. Market opened Fl

9:17 - Rolled up PE 13200 PE to 13800 PE

9:19 Squared 7th Jan 14300 CE and Sold 14th Jan 14700 CE - Decided to take moderate adjustment plan

9:22 - Sold 7th Jan 14000 PE with the view to recover losses in the current week itself - Aggresive trade  - this is by seeing the market tick moving higher - i thought i will not go 200 points lower in 2 days and took this trade - This was not as per my plan- Hence less conviction on tis trade . Sqaured of 13400 PE to get margin to sell more of 14000 PE

9:35: Got scared by the sudden down move in the market against my market expectation and squared of my 14000 PE @ 4.5 K loss - THis loss could have been completely avoided by not taking the trade which is not in my plan in first place and since its not in my plan - i was not fully convinced and any small move against this made me to believe that i was wrong and square off the position in fear. Moreover you are already in fear - hence any market move against you increases the fear

9:36 : Went back to my earlier made plan of selling 14th Jan 13400 PE which is 800 points lower than CMP 

9:38 : Sold more Jan monthly 15000 CE to make additional money to recover the losses made in 7th Jan - Learning - Dont sell CE when market is in -Ve instead sell in upmove as you will get more premium


11:32 : Nifty was at 14220  i though market will Consolidate remain flat - Hence i moved 7th Jan 13400 PE to 13800 PE

2:15 PM: Market fell to 14050 - i was scared that 13800 PE position will go ITM by 7th Jan and was too tempted to book losses - But remembered Dec 21st Loss made around the same time of the day and  dint book loss - market recovered from the low point - Happy with this. 

 Learnings: 

1. Do not take positions from 9:15 to 9:30 AM when the market opens flat - as most of the time this period is volatile and market direction is not determined

2. 1:30 to 3 PM European markets open time - Markets will be violent - dont square off or get threatened 

3. Stick to your planned trade and dont get carried away by the swings in the market and change your plan - you will lack conviction in those trades and square off before target

4. Understand the resistance and Support level as that will give confidence / conviction on the levels that you have taken in the trade and violent moves will not bother you