This Nifty Fall was expected after Budget 2018. If you were my option course member it would have saved you money (they get different newsletters from time to time what to expect from market in near future, which strategy to trade etc).

Anyway if you were long on Nifty I suggest do not wait for any kind of hope. Long term investors are not happy due to Long Term Capital Gains Tax at 10% and exiting their positions.

You can either:

1) Take a stop loss and exit and wait for markets to stabilize, or,
2) Hedge your positions and exit whenever you want – if you know what I mean.

The second option is better because you never know when a bounce back may come. We have enough time for expiry. If a bounce back comes you may regret the stop loss, therefore its better to hedge your positions and sit tight for a reversal.

Proper hedging is part of my course and cannot be explained here.

Whatever you do PLEASE DO NOT TRADE ON HOPE.

After a major news its either BIG Profit or BIG Loss, I want you to be safe – so was reminding you since very long via my newsletters and posts in my blog to be safe.

I do not know if you listened to me or not.

The course will not only teach you good strategies but there is some very good hedging techniques there which will stay with you forever till you trade.

It easy to make money if you are happy with small profits, its hard to make money trading if you are looking for 10% a month.

I know what I am saying will not appeal you but what I am saying is a fact. Lot of people will not do my course just because I am promising them a fact, but they will easily pay 30k to someone who promises to teach them strategies that makes 10% a month.

I have told you the truth – its up to you to believe or not.

Course fee can be paid here online.

Save your hard earned money.

Check my yesterdays post. What I wrote yesterday is now the truth.

Long Term Capital Gains Tax (LTCG) – investments in equity mutual funds and stocks over 1 year, will now be taxed at 10%. The set date is 31st of January, 2018. The highest price traded on that day of the stock investors had bought will be calculated as base price to check for the final profits.

This is very complicated as many investors may not now the highest price traded on their stocks on 31st of January, 2018 (Wednesday), and may end up paying more taxes which will never be refundable.

BAD news for long term fund investors and equity investors.

Along with a short term trader I am an investor too. Sad news for me as well along with many investors. 🙁

Anyway luckily there is no change in Short Term Capital Gain (STCG) taxes. STCG is taxed at 15% of the profits made in a year.

Now think about this – since in mutual funds investments and equity investments, we do not get leverage we have to invest a lot of money to make a lot of money. Though long term taxes over 1 year till now was ZERO, fact is result is known only after 5 years that a mutual fund or the stocks you bought performed well or not. So most were invested for years.

Rarely anyone invested for one year just to save tax. It was for both – save tax and make more. Now one part is gone for certain and second part is unknown.

This is a LONG WAIT and then even if you make a profit – give back 10% of it to the government.

THIS PROFIT YOU CANNOT HIDE UNDER ANY CIRCUMSTANCES like most Indians do.

Waiting for years not knowing what will happen to your money and then paying 10% tax on profits is painful.

Frankly if you can compound your money with a regular income every month still paying 15% tax is much better than waiting for 5 years and then do not know if you will ever make a profit.

There is another point – we do not invest small money for the long term as we know it will not make sense even if it gives a profit. Every month 10k SIP monthly for 10 years equals investment of 12 lakhs and then if you make let say approx 6 lakhs profit – pay a tax of 60,000 to the government reducing the profit to a large extend.

🙁 🙁 🙁

Anyway I feel 15% tax is much better than 10% tax if you are sure WHATEVER happens you will still make 25-30% a year (I am not even taking an average of 3% a month – I am deliberating reducing it) – year after a year. Instead of waiting for 5 years and not even knowing what will happen to your money. And then profit also gets reduced.

You can do my conservative option course and make at least 25-30% a year – whatever happens in the markets. Say for example Nifty stays at 11k to 13k level for next 3 years which is very much possible, we do not know, or it may go into recession or crash – who knows? But you will still make money every year.

Take small steps every month and move forward. You do not know what will happen in 5 years time. Time will pass anyway but finances should be controlled and it should be IN YOUR HANDS.

Why wait so long?

You can pay here for the course and start making monthly income for life by the side.

Nifty falling, India VIX also falling is a strange indication. It looks like HNIs as well as DIIs are not expecting anything extraordinary from the budget plus there is a small indication from different media sources that government may implement taxes on Long Term Capital Gains (LTCG). Right now Long Term Capital Gains are not taxed. This will be bad news for investors.

Long Term Capital Gains will increase short term trading. More than 70% of investors do not sell stocks and mutual funds just to save taxes – including myself. I do not know if that become true what will happen to the markets but this is not a good news.

Anyway if you are an option trader your only concern is avoiding losses and maximizing profits. This is only possible through hedging your trades. You can learn hedging in my course.

At least for next 10 days, until the budget is out and things become clear, trade with caution please.

Sensex/Nifty and India VIX are inversely proportional.

Look at last 5 years graph of India VIX:

5 Years India VIX 29-Jan-2013 to 29-Jan-2018

Source: http://www.moneycontrol.com/indian-indices/india-vix-36.html

And now look at 5 years graph of Nifty:

5 Years Nifty 29-Jan-2013 to 2-Jan-2018

Though its hard to find out everyday – you can still see how Nifty has continuously gone up but Inida VIX has fallen.

India VIX has a range, usually from 10-15 which is normal.

In the last five years India VIX was highest at 37.71 on 09-May-2014:

Highest India VIX

India VIX rises during major events. Because Budget 2018 is just 2 days away India VIX has gone up from average of 13-14 to 17-18:

One Month Rise of INDIA VIX due to Budget 2018

It will come down from 2-Feb-2018 onward after the budget day 1-Feb-2018.

India VIX is fear factor index of traders. In the US traders can trade VIX but in India the volume is almost zero.

The trading symbol of the future contract of India VIX is INDIAVIX but no one trades.

Read this article to know more about India VIX trading:
India VIX Futures – Trading The Volatility

What you can do during Budget 2018?

Option buyers are at huge risk as VIX may drop anytime after the budget and they may lose money. If you are option buyer it is advisable to reduce your risk.

But that does not mean sellers will make huge money. Yes you will if there is a move in the direction you shorted your option, but if not it will become a naked future trade going wrong.

TRADE WITH CAUTION.

Budget (high volatile) times may make you more poor than rich.

Please trade with smaller quantity than what you usually trade.

What Is Swing Trading

Swing trading is buying low and selling high in a short span of time. Some traders do it Intraday called as day traders and some take position for a few days.

Swing trading combines fundamental and technical analysis in order to find the stocks direction from the current position. Swing traders do not look for only up direction, if they feel the stock may go down they short them. All they are looking for is short momentum.

When they see the stock is not poised to move they do not take the trade. The benefit of swing trading is efficient use of time and money and higher returns. However their are drawbacks as well like high brokerage commission and high losses if their trade goes wrong.

Swing trading can be difficult for the average retail trader who is not equipped with either technical or fundamental knowledge. Some of the good technical indicators are Bollinger Bands, Candlesticks, moving averages, Average True Range – ATR etc.

The professional traders have more experience and information. They always trade in brokerage houses with lower brokerages. On top of that they get better margin.

Large institutions trade in very big lot sizes. They usually get in an out quickly. Some automate their trades. This is called algorithmic trading.

Knowledgeable retail traders can take advantage of these things in order to profit consistently in the marketplace. In this article, I will lay out what should be daily routine for traders like you and me. Its not that hard to be successful.

How To Do Swing Trading

Before reading this article I suggest you read this article on Swing Trading Rules.

Pre-Market Research:

You must read newspapers to know what has happened in businesses when you were sleeping. Look for any major news that may move the markets. This will help to find potential opportunities to trade.

Keep An Eye In The Following

Traders must be thinking why Nifty is running up like mad? This is a Budget 2018 Rally nothing else.

Its called Expectation Rally.

Do not forget that after GST implementation this is the first budget of this government.

Hope has no limit.

The rally will end once the budget is out.

But all this is tension of a speculative trader.

You may be long or short I do not know but if you are not making profits 70% of the times you trade then you are for sure losing money.

When there are strategies where you need not predict market direction yet make money then why are you still losing money?

Its better to be a conservative trader looking for small but consistent profits rather be an aggressive trader looking for a home run which never happens.

If you will be happy with 2-3% of profits on margin block per trade then do my course. You need not read newspapers and speculate on hope after you do the course. You will not need tips providers either who rarely give great tips to make money. You will get a proper plan to trade – you are paying to learn that plan not just a random strategy..

You can pay for the course here – click to read what you get and about support.

EOD (End of Day 22-Jan-2018), INDIA VIX is up by 10.09% this is due to upcoming budget on 1-February-2018. This will increase until budget and will fall after that. Market direction will depend a lot on budget announcement.

INDIA VIX EOD 22-Jan-2018

But when INDIA VIX moves a lot option premiums moves a lot too.

If you do not know INDIA VIX has a lot of effect on option premiums. They are directly proportional. When INDIA VIX rises option premiums will also rise. When INDIA VIX drops option premiums will also drop creating a lot of problems with option buyers. When INDIA VIX rises option premium rises creating a lot of problem with option sellers.

Trade with caution until the budget is out.

Hedge your trades. Do not let a single trade wipe out your account.

Do not forget your stop loss, profits targets.

For conservative, cautious and new traders its highly recommended to hedge your trades. Do not let a single trade wipe out your account.

If you do not know hedging you can learn hedging strategies and never be bothered again about market direction, options premiums etc. You can trade, make profits every month and and live a peaceful life.

You can see here how traders are performing after doing the course.

Pay for the course here.

New traders and even the experienced ones fall for greed or show no patience and book profits early in a profitable trades but let losers ride for more losses in their trades. This leads to more losses and small profits. Ultimately their financial year ends in a loss.

I have told this many times in my blog not to speculate and trade but how many listen? Buying options as a pure speculation is gambling not trading – it will not make money. This falls under greedy trading not well planned trading.

Greed is your bigger enemy than fear in trading

Lets compare trader Greedy Trader A and Conservative Trader B.

Both start with 10 lakhs and decide to meet after 10 years. Greedy Trader A keeps doing speculative trading and makes a loss of 9 lakhs in 10 years. Conservative Trader B makes just 1.5% a month and here is what he ends with – Rs.5,969,322.87 (Rs. Fifty Nine Lakhs 69 Thousand 322.87).

See this:

Rs. 10 lakh compounded For 10 years @ 1.5% return a month

Greedy Trader A wanted to make one crore in 10 years with 10 lakhs whereas Conservative Trader B wanted to be in profit even if it means making 1.5% a month. After 10 years who is a better trader Greedy Trader A or Conservative Trader B? The answer is obvious.

Can you see even 1.5% return a month is much better than losing money trading options, stocks or futures? You can do my conservative option course and make much better return than this.

The biggest problem with traders is they do not let the winners run in their trades. Here are some tips on How To Let The Winners Run In Stock Trading.

The Basics Of Trading

Your trading should consist of small losers and big winners. To do that you have to make sure your winners ride. Letting your winners run is very important to long-term success in trading. If you have a 50% win rate then letting the winners run is very important for you. Just taking the profit out because you fear losing out does not make sense in the long run.

Here is what you can do to let the winners ride:

Keep Three Profit Targets – Your Stop Loss Should Be Less Than Your First Profit Target

Divide your money in three equal parts. When your first target is hit, take profits out from 33% of your money in the trade and bring stop loss cost-to-cost. When your second target is hit, take out the next 33% of your money in the trade and bring stop loss to the first target. When your third target is hit, take out the last 34% of your money in the trade and start looking for next trading opportunity.

Moving Averages Are Important

Here is an article on moving averages. However moving averages is a vast topic and cannot be covered here. That said Moving Averages are a great tool to know the support and resistance of a stock of few days (for short positional trades) and even months (for longer positional trades). Use them extensively in your trades.

For example if a stock has broken its 9 EMA (exponential moving average, or EMA, is a stock chart tool investors use to watch trends in the price of a stock) either in the buy or the sell side its a great signal to trade and there is a lot of chance that the trade will be profitable.

Think About the Opposite Trader

If you are short on a stock think when the buyers may try to enter. This will help you to make the right targets 1, 2 and 3. This will allow you to stay patient with your trades. You will get a clear sign that the trend is over, and it is time to take profits.

Do Not Care For Minor Intraday Fluctuations or Mark To Market – MTM

MTM (Mark to market) creates the biggest fear in traders mindset to press the panic button and exit. Do not fear MTM if your stop loss is in place. For positional trades it is highly recommended that you hedge your postilions properly else overnight some news may come which will be bad for your trade and next morning your trade may exceed stop loss make huge losses for you. Do not let that happen and learn to hedge your positional trades. This is very important.

HNIs never take naked positions. They invest millions of dollars and make sure they hedge their positions so that they don’t lose millions in a single day or trade. They never do and almost always make money. Trade like HNIs even if you are a small trader.

If you are a small option trader and losing money trading options you can do my course to make a small 2-3% average per month, monthly income. You will learn some good well researched hedging methods not many retail traders follow.

See this amazing Nifty rally (Bull Run) of the year 2017:

Nifty Rally 2017

Biggest question in traders mind is When It Will Stop or What To Do Now?

Who is asking this question? Speculative traders.

Speculative traders have a bad life. They are hanging between BUY or SELL, Call or Put, which stock to buy Intraday etc.

This is not the way you should be trading.

You must have a highly successful plan in your trading tools, not think about what to trade next day. Speculation will take you nowhere.

Check this thinking of a speculative trader:

Speculative Option Selling

The chat:

I have one clarification and need to know, if I am selling naked Nifty Feb put option of strike price 10600 @150 and can we buy the same put option later and can be adjusted.

If yes how much we need to invest or margin required.

And is there any high risk and is it advisable?

My reply: Naked option selling is risky but yes it can be bought back. Margin blocked will be Rs. 45,000 (my broker block that margin for 1 lot Nifty as on Jan-2018 Lot size Nifty now is 75)

His reply: Ok thanks but buying also I am feeling risky because please don’t take mistake, if we are selling the put option of strike price around 10500 and if the market is coming down to even around 10500 I think we might not be loosing anything.

Is it correct or wrong?

Please let me know.
===============

He was planning more dangerous speculative which is not disclosed here.

Please DO NOT copy the above trade its just his opinion. He may be in profit or in loss, but if Nifty falls heavily in next few days he will be staring at a huge loss.

This is the reason you should never speculate and trade.

Even when investing in stocks you must do research before investing. In stocks you have a life time waiting period, but in options and futures you do not have much time. You have to be right before that time or lose money.

How many times will you be right trading like this? And can you continue this type of trading for life?

You can learn some good non-speculative strategies in my course or research yourslef but please stop speculating in the hope to make a lot of money but lose money.