Month: April 2021

Apr21-W5: Nifty to drop below triangle this week (Apr26 to 30)?

Red openings have been opening for 3 Mondays in a row now. The difference last week was that there was a gap down which was filled to a large extent on Tuesday. Overall, Nifty did not ‘move’ much but over the past 3 weeks, it has been steadily going down.

Now, here’s what I am looking at:

Though Nifty has been failing to break the triangle, my bias is on downside since Nifty is below the moving averages and I expect coming week’s price action in the yellow highlighted box

Thus, scenarios for the week ahead…

ScenarioProbabilityAnticipated Price Action
ConsolidationHighBetween 14150 and 14550ish
DowntrendHighIf breach below 14150ish; to drop till 13800ish
UptrendLowIf breach above 14550ish; to rise till 14800ish

I wonder how this Monday will begin. Will it break the pattern of past 3 Mondays by opening in green? But if it does so, will the rest of days go in red? It should not feel bad to see Nifty levels travelling towards realistic levels. The party has gone far too long and far too loud.    

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.

Apr21-W4: Nifty trapped in triangle (Apr19 to 23)?

Last week was almost a replica of prior week, though the momentum was larger this time. Monday again was a red day but RSI signaled bullish divergence. This led to ascent during remaining days forming yet another doji on weekly timeframe. Thus, my hypothesis of weekly consolidation stands vindicated for 2 weeks in a row now (everybody writes such arrogant statements on twitter etc, why not me? 🙂 )

Now, here’s what I am looking at:

Nifty is now in a triangle and I expect further consolidation this week in the yellow highlighted box unless there is a breakout from triangle in either direction

Thus, scenarios for the week ahead…

ScenarioProbabilityAnticipated Price Action
ConsolidationHighBetween 14250 and 14850
UptrendLowIf breach above 14850ish; to rise till 15000ish
DowntrendMediumIf breach below 14200ish; to drop till 14000ish

With last 2 Mondays being big reds, it would be interesting to see how this week begins. Such occurrences affect traders psychologically causing emotional biases. Furthermore, the continuous flow of negative news can also invoke bearish views. It becomes all the more important during times like these to focus on price action only.    

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.

Apr21-W3: Nifty consolidation to continue?

Even though Nifty began last week with Covid fever, the recovery was equally brilliant and by Friday, we are back to where we started. At an overall level, I can safely claim that my prediction of consolidation with a mix of red-green candles was correct (more details here). However, the manner of consolidation took me by surprise. I am sure it would have caused a lot of trouble for traders as well.

Now, here’s what I am looking at:

Nifty is clearly consolidating in a range, highlighted as yellow box. But since price is above averages, the bias is on the upside.

Thus, the following are scenarios for the week ahead…

ScenarioProbabilityAnticipated Price Action
ConsolidationHigh14550 to 15000
UptrendMediumIf breach above 15050ish; to rise till 15300ish
DowntrendMediumIf breach below 14500ish; to drop till 14200ish

I personally don’t think that the continual rise of covid cases over the weekend would cause a red opening since that factor was already accommodated last Monday. However, if states like Maharashtra impose lockdown, it can trigger selling. Let’s see 

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.

Apr21-W2: Time is money

Despite having taken hundreds risky trades, I did have butterflies in my stomach before taking the first relatively safe nifty trade of wannabebull.com. It may have been because of performance pressure since I did want the first week to not only be green, but meet the target CAGR of 15% also. And there’s my learning straightaway. The minute you start keeping expectations from a trade, your mind starts making wrong decisions.

The first trade should have been a no-brainer. Since market opened negative, selling calls was a sound option. But I had reasons to hold bias for uptrend (more details here). So instead of selling calls, I sold puts on the first sign of pullback. It did not take long for Nifty to break the swing low and I had to sell calls. The feeling of being stupid soon converted to panic as I saw loss of more than 400% on those puts. That’s my max stop loss limit.

But then the voice at back of mind said that the strategy was not only about being directionally correct, it is also about theta decay. Why not wait until 2:45 PM before booking loss? But then, what if Nifty falls more? Well, the intraday ADX seemed to be topping out. And so I decided to hold on. The decision somehow worked.

But then the same problem happened on Tuesday when I sold call options during the first 5 minutes of opening, thinking that it was going to be a repeat of Monday. The market rebounded sharply and those calls now needed help of theta decay again. Moreover, RBI meeting on Wednesday meant that option premiums were going to remain inflated. Luckily, Wednesday and Thursday brought the power of theta decay in full glory and the week was not only saved, I ended up earning more than target ROI (more details here).

All thanks to time!! Unfortunately, I have complete lack of it till end of month now. Even during these Covid times, my landlord is forcing me to change house while my office work is getting a bit hectic. Considering these factors and the relatively high monitoring that I had to do over the week, I have decided to pause trading till end of this month. It is ironic that I am pausing before even properly beginning but just like the week did not exactly go as per plan, life too does not work as per wishes.

Meanwhile, I shall continue to write views on Nifty and blog posts while also working on WordPress stuff. Nifty trading to be resumed when the time is right. After all, its all about time and timing anyway.

Apr21-W2: Beats estimates

As I review, I am now realizing that the market made a doji candle on the weekly timeframe. And all these days, I was wondering why there is so much volatility in the market. As the saying goes, don’t miss forest for the trees.

So the below are the 4 candles during which I took trades, with each day being completely contrary to what I was anticipating (more details here)

Anyhow, here are the results:

Net Profit (after deducting brokerage)Capital deployedWeek’s ROIAnnualized ROI
Rs. 4,000Rs. 6,40,0000.625%38.26%
Where annualized return = ((1+week’s return in decimal)^52)-1)*100

In honesty, the key reason for achieving higher return was sheer luck. Though I was expecting consolidation during the week, but the way it happened was baffling to me. My daily basis analysis backfired (more details here) and I had no choice but to sell options on both sides. Basically, theta decay saved the week. But then, that’s what the strategy is all about, isn’t it?

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice

Welcome to WannabeBull.com

This website’s main purpose is to act as a log of ideas and trades which I undertake on weekly basis. Maintaining logs is one of the most important aspects of being a disciplined trader. However, since log maintenance is not exactly a very exciting or motivating activity, I decided to build this website to stay diligent and entertained at the same time. I will keep these logs simple so that readers would be able to understand and perhaps take such trades on their own if they wish so. Lastly, I hope to receive feedbacks from this website to improve trading skill or devise new strategies.

My trading strategy is highly conservative in nature. I will be selling far out of the money weekly options in direction of the trend. I may sell options on the other side as well if things don’t go according to plan. I believe that even if my analysis is wrong, theta decay of options can help in making money. I would be keeping a stop loss between 200 to 400% of my selling price, depending on time to expiry. I have observed that the strategy holds potential to give a return of more than 15% on annual basis. It does not require a lot of monitoring also.

Here’s a breakdown of the site’s pages:

  • Plan: Posts here shall briefly describe
    1. What happened to Nifty in previous week
    2. Daily timeframe chart with support / resistance levels
    3. Possible scenarios for week ahead
    4. My bias and trading action plan  
  • Trades: The page shall mainly display screenshots of P&L and order log, along with ROI numbers. In case a trade goes in loss or if I faced any challenge, I would be writing my experience
  • Blog: This is the page to vent out my wishes, experiences and learning. Posts here can be absolutely random

There shall be a new post on all the above 3 pages every weekend. Since the 3 are correlated, I shall be using a common heading syntax so that it is easy for reader to know what ‘trade’ and ‘blog’ is an outcome of ‘plan’. The syntax is <Month><Year><week> wherein week number is governed by Thursday.   

  • Education: I like to document whatever I learn in fundamental and technical analysis. I shall now be using this page for the same purpose, but this is only for new learning and not what I already know. However, I would be more than happy to write on any topic if I receive a reader’s request. Thus, the frequency of posts here shall be random.  
  • Watchlist: This page shall contain daily timeframe charts of selected large cap and mid cap companies which are fundamentally sound and make sense for long term investment. I am planning to track these and either take positional trades or invest for the long run. At least one post per month can be expected from this page.

Most people who trade options do it for the purpose of getting rich overnight. While it is possible, this website would not be able to serve that purpose. At the risk of being discriminatory, I believe that this strategy is best suited for women who are looking for work-from-home careers and also for anyone who wants a tiny little second stream of income. Selling options in India is a costly business as 1 lot needs an approximate margin of Rs. 1,25,000. Thus, meaningful trading requires an initial investment of at least Rs. 5 lakhs.

I feel or at least hope that blogging shall keep me consistent and profitable. All screenshots on ‘Trades’ page shall be unedited images. It would be great if I can connect with more experienced traders who have been selling weekly options so that we can share ideas. If you are one of them, please leave a comment here or connect using the form at bottom of home page.  

Apr21-W2: Nifty on the rise?

I wonder how many people were actively trading the markets last week. With Holi and Good Friday cutting length to 3 days only, trading would have been a light affair. It seems Nifty too was keeping it cool. Green on first day, red on second, and back to first day high on third day. Good for investors but traders might have felt the churn.

With the candles hovering around moving averages, it is tough to say if we are in uptrend or downtrend though my bias is on the upside. Time will tell if RSI breakout is good enough for price to stay above trendline.

Scenarios for the week ahead…

ScenarioProbabilityAnticipated Price Action
ConsolidationHighIf rise till 15050ish; to stay above 14850ish
UptrendMediumIf breach above 15050ish; to rise till 15350ish
DowntrendLowIf breach below 14650ish; to drop till 14350ish

Thus, I am going to begin by selling puts unless I see a red opening on Monday and adjust positions as days unfold. I am expecting that like last week, we may see mix of green and red candles this week.  

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.