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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