I was very skeptical last weekend while writing this blog. I was carrying OTM positions but they did not have much premium in them. The charts too were showing that volatility was compressed by a lot. I convinced myself that the positions that I have are quite far. I now have tight SL rules and I will take the loss if it comes.
On Monday morning, I told my wife that an impulse candle is coming on perhaps a 75 minute timeframe. She checked with me what I was exactly trying to say? I said that there may not be a zig zag movement. It will be a unidirectional linear blast. My wife said that if that is indeed the case, it is going to be a bull trend.
So it is not that the last week’s massive move was a surprise to me. I took the SL on Monday itself, and felt good that I am now acknowledging and taking SLs. But it was the next thought which ruined it all. The thought was to recover the loss of Rs. 3150.
So, I sold call options just 100 points away from the strike on which I had booked loss. If all went well, I would have recovered loss completely while gaining whatever I was making from put options. But on Tuesday, my SL was hit on this new strike as well.
My mind, body and soul were not willing to take 2 SLs in the same week. I believed in the power of theta and decided to let it go. And Nifty literally let itself go. There was no stopping it. The relentless and merciless trend made positions go in deep red.
On Wednesday afternoon, I booked loss on 17150 CE and moved to 17200 CE since it seemed like a safe strike. I kept fluctuating between these 2 strikes on Wednesday and Thursday. By Thursday EOD, I decided to roll-over 17200 CE and await mean reversion.
Much of the reason for taking this decision was that this is what I did after loss during first week of August also. I recovered about 50% of loss during second week due to rollover. Stupid memories. The market does not work this way.
I have now left myself at the mercy of Nifty. The charts do not look promising. I may have to rollover 1 more week. Despite knowing it all, I have let myself enter this ridiculous situation. This is bad trading, but I now know I am more ready to face such trend in future. Just need to somehow mitigate this ongoing loss.