While thinking on what I did right the past week, I realized that I made money primarily because of high India VIX. It obviously makes sense to do selling during such times. I wondered if I could use India VIX chart to my advantage.
Yes, I can. Like everything else, India VIX follows principles of mean reversion and on an appropriate timeframe, the stochastic is working beautifully. This is the key reason I was able to book a lot of profit on Thusday as VIX crashed and met the average.
Given the fact that Nifty has to eventually meet its averages on weekly timeframe, this is an important learning for the next few weeks. If Nifty is to correct, IndiaVIX will remain on the higher side. A closer tracking of India VIX charts can help in timing of selling the options.
During the beginning of my trading week i.e. September 27th, I could have sold some more lots. The opportunity struck once again on September 28th and this time, I completely missed the bus. This is despite the fact that I had made an absolutely right prediction about market movement.
I should not complain much as the past 3 weeks have been quite kind to me. I should stick to basics and perhaps, profit maximization objective can wait. The focus on capital preservation and consistency remains for now.
So my Tradingview now opens with charts for Nifty spot, Nifty future and India VIX. It may sound like a case of over-analysis but I believe this is actually the bare minimum. Fireworks work well in unison.