#Quora Quesrion: What is the reason of increased volatility on expiry days? Stoploss are hit on both sides? #Nifty#BankNifty
Reasons is trainers teaching expiry day trading on leverage to beginners. Leverage is 10 to 15 times. Not everyone can be smart money. 1/n
Not everyone can win. So smart money induces artificial volatility to hit stoploss to both sides. Weak retailers book stoploss. Learned somehow achieve breakeven or profit. Smart money collects profit and goes all the way laughing.
What happens to trainers? 2/n
1. Trainers have slowly shifted to positional trading if they know how to. 2. They earn money from training. 3. They earn from brokerage from innocent trainee to whom at the end of seminar, cheap brokerage on leverage is given.
Avoid this. End of thread.
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Going forward, I am extremely cautious on BANKNIFTY.
I really was rooting for BANKNFITY to be bullish in coming days. Break of 39700 will take BANKNIFTY towards 37500 levels.
This is 1 Month Chart of BANKNIFTY. Break of 39700 (Support) will push prices further down.
On Daily Charts, we are standing at a support and gave a dead cat bounce. COI did not recede from this point but as you can see there has been continuous selling. At support, either this gives a bounce or indicative of incoming sell off.
MACD and ADX on Hourly Chart at support are getting sideways. Not bullish but just sideways.
Below 0 Line, MACD bullish is still a sideways market. ADX receding from 40-50 level below its EMA again a sideways sign.
At support, I will create positions will slight caution!
And yes, I am rightly worried. Its a neighbouring state.
This has been happening for past few months now. My immediate question was, what is the central government doing? I have no expectations from AAP. Or uprising of people of Punjab against such elements, as people themselves chose AAP. Many I talked with are regretting it now.
Today AAP might be the biggest threat to National Security. With Jammu and Kashmir stabilized, AAP might open a new frontier for Indian Government.
But no news media is showing this. Or Algorithms are not even picking it up. Why? Vested interest? But again back to question 1...
William's Alligator is probably the most underrated indicator in moving average category.
Alligator follows the premise that market is sideways for 70% of the time and trending only 30% of the time.
This is where William's Alligator can be a great tool for traders.
Why William's Alligator can be a great tool for traders?
It can identify Bullish, Bearish and Sideways market pretty easily. Problem is, traders don't know how to use it effectively. Alligator has three lines:
1. Lips - Fastest Line 2. Teeth 3. Jaws - Slowest Line
Book Interpretation is when Lips Crosses above Jaws, it's a buying opportunity and when below its a shorting opportunity. And when three lines are crisscrossing, instrument is sideways.
BUT this does not make it a tradeable indicator in practice. Here is what should be done.
I have no sympathies for #Scammers who were duping people with lakhs and crores of screenshots.
At first, I along with friends of mine were in awe of how they were generating this much return. For almost, 2 years I worked a lot and tried to break the code.
Do read and retweet.
A lot of ideas were worked upon on Amibroker may it be ITM Selling of Option, Option Doublers in 2 - 3 days, Intraday Option Buying, Future Holygrail and what not. In the process we were able to make Option Chain on Amibroker, calculate option greeks on Amibroker and what not.
But no definite system was built.
If we cracked up Option Buying or burst moves, it was difficult to ascertain position-sizing. For eg. position sizing average size, doesn't make the profit so lucrative. And if the position-size is big, loss could be 70% in 3 trades.
To understand options, three concepts are required: 1. Intrinsic / Extrinsic value 2. Time / Theta Decay 3. Implied Volatility
Option Value = Intrinsic + Extrinsic (Value)
Intrinsic Value - Value of Option if it were exercised today at CMP.
Extrinsic Value - Total Value of time in the option.
ATM and OTM options are 100% extrinsic value. ITM options have more intrinsic and less extrinsic value.
ITM Options: Intrinsic Value = Price of Underlying Asset -
Strike Price
For eg.
Nifty is at 11,416. 11400 CE of 29 Oct 2020 is at 224.40/-.
Intrinsic Value is = 11416-11400 = 16
Extrinsic Value is = 224.40-16 = 208.40.