Overconfident of mean reversion tactics and filled with greed to recover ridiculous penalty due to SEBI’s shenanigans of last week, I entered the mean reversion trade early. I think it was Tuesday. The trade backfired and I was in deep red.
It was not like I was completely off the mark. On Wednesday morning, I did get a chance to exit almost at breakeven but emotions overcame reasoning. I did not book and watched the trade go back in deep red within rapid fire time.
I knew that the same strike of 17850 CE would not be able to recover by Thursday. I went in by another 50 points and shifted to 17800 CE. I prayed on Wednesday night and Thursday morning luckily opened with a gap down opening. Though the overall profit was good but witnessing a realized loss of Rs. 1.25 lakhs is simply unjustified.
In future, I should exit when breakeven and switch to safer strike until mean reversion target is met.
So I traversed through the following candles during the week:
|Net Profit (after deducting brokerage)||Capital deployed (approx)||Week’s ROI||Annualized ROI for this week||Total no. of weeks traded till today||Annualized return till today|
|Rs. 71,856.3||Rs. 1090902.65||6.58%||2658%||30||75.04%|
The following is breakdown of week’s positions
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