Market Secrets - Where should I start?

Welcome to Market Secrets Trading family.!

We are very different from all the telegram channels out here. We don't provide any update during Live Markets. So go through this post fully to understand what we offer.

Why can't you provide live updates? 

2 Reasons:

1. We(Admins) are also traders and we need to have full focus on the terminal. Also, providing live update is a distraction.
2. What is the point in giving live updates if we can provide the exact levels which we will be using for trading even before market opens. Anyway, we will be using same entry and arget during live market. So there is clearly no need to give live updates. Moreover, we don't believe in making you wait for SL/Target after giving you an entry point. You should know everything about the trade before you get into it and that's why we don't provide any live updates.

How am I supposed to trade without live updates?

Just follow the levels published in the channel for Index & Stock Trading. We are using the exact same levels ourselves.

What do you offer on daily basis?

1. We provide precise Index Trading Levels for Nifty & Bank Nifty on daily basis which can be used for Future/Options trading directly
2. We provide 4 stocks for Intraday Trading with proper SL & Target.

What is the purpose of listing down the stocks under 52 Week High Low Category?

We have published a free intraday/positional trading strategy using 52 Week High Low Data. It is available in YouTube for everyone to Learn & Trade. If you are looking for mastering a strategy, I would suggest to try this out. Purpose of listing down the stocks under 52 Week High Low Category is to ensure that whatever list you have prepared yourself based on this strategy matches with my list. This is published everyday to ensure that the list you have is the right one.

What else does your Team offer through telegram?

1. We publish monthly levels file at the beginning of every month. Basically this file will have list of all the FNO stocks and their positional trading levels for that particular month. If you are a positional trader, this file is your treasure. More than 1000 people are already using this file on daily basis.
2. We provide multibagger intraday option calls occasionally as well.

What does Market Secrets offer when it comes to Learnings?

We have already had 3 Live Webminars through YouTube to explain and discuss about various strategies we have shared so for. We have shared our strategies on Intraday Trading in Cash/Futures, positional trading using monthly levels file and various option strategies for regular and consistent profits. All these have been shared through our YouTube channel and it is completely free for everyone. All you need to have is the patience to learn and practice the strategies.

We are working on publish few other strategies as well, so subscribe to our YouTube Channel and BELL icon, so that you will get invitation and alerts for all our Live Sessions/new uploads.

YouTube channel link: https://www.youtube.com/c/MarketSecrets

Where should I start?

Go through our YouTube channel, pick one Strategy that you like and watch that video again and again until it becomes a second nature to you. Focus  only on that Strategy for next few months, we assure you that you will succeed definitely.

Links:

Market Foundation:

If you are totally new to the channel (or trading as such) and clueless on where to start with your learnings - watch these 2 videos first. It basically covers everything you need, it would take 45 minutes totally but it's very very important. 

https://youtu.be/oDMsD1FEh4U

https://youtu.be/MbQRnde9WSc

Trading is easy, Trade less, earn more is our Mantra. Discipline contributes 75% to your trading success whereas strategy contributes only 25%. If you want to be a successful trader, learn to be a disciplined trader first. 2 videos mentioned above serves this purpose.

Importance of Positional Sizing: 
http://marketsecretsrevealedforyou.blogspot.com/2018/01/positional-size-calculator.html
Trading Management Tracker:
http://marketsecretsrevealedforyou.blogspot.com/2018/02/trading-management-tracker.html

Rules for trading the 4 stocks published in the channel on daily basis:

http://marketsecretsrevealedforyou.blogspot.com/2018/04/monthly-levels-file-april.html

Intraday Index Trading:

If you want to trade on Index (Nifty/BankNifty) based on the sure-shot levels posted in the channel on daily basis, learn it now from here: https://youtu.be/f1EnPYRPlg4

52 Week High Low Strategy:

Learn Cash Trading based on 52 Week High Low Strategy & take trades independently.

Learn it now: https://youtu.be/bxaxIkJjBkM

Any doubts on this strategy?

Watch Q&A Session: https://youtu.be/iqvoVPXZYjQ

Rules for Positional Trading Strategy using 52 Week High & Low:
http://marketsecretsrevealedforyou.blogspot.com/2018/02/52-week-high-strategy.html

Rules for Intraday Trading Strategy using 52 Week High & Low
http://marketsecretsrevealedforyou.blogspot.com/2018/02/easy-intraday-trading-strategy.html

Rules for Intraday Trading Strategy using Modified 52 Week High & Low

http://marketsecretsrevealedforyou.blogspot.com/2018/05/monthly-levels-file-may-2018-updated.html

Positional Trading:

Strategy for positional trading in Futures/Options - Monthly levels file Strategy.

Learn it now: https://youtu.be/MbQRnde9WSc

Monthly levels file for every month is available in the below link for download: 

http://marketsecretsrevealedforyou.blogspot.com/2018/04/monthly-levels-file-april-update-1.html

Options Trading:

If you are interested in learning options and wants to trade like a pro in options, especially Bank Nifty weekly expiry, learnt it from here right now.

https://youtu.be/CaYcnViPVOk

https://youtu.be/XogOdJ3-5kw

https://youtu.be/7ryMmJrnI50

Blog Links on Option Trading:

Option Trading - Basics and Strategies
http://marketsecretsrevealedforyou.blogspot.com/2018/02/option-trading-strategies-training-ppt.html
Option Max Pain Theory - How to use it for maximum gains?
http://marketsecretsrevealedforyou.blogspot.com/2018/03/max-pain-calculator.html
Bank Nifty Weekly Expiry Option Trading Strategies
http://marketsecretsrevealedforyou.blogspot.com/2018/03/option-trading-strategies-and-bank.html
How and Why Max Pain changes/moves?
http://marketsecretsrevealedforyou.blogspot.com/2018/04/how-and-why-max-pain-changes-on-expiry.html

To Reiterate: 

We won't provide any live updates during market hours. Nifty, BankNifty levels and stocks to trade for the day will be provided even before market opens. Watch the video link provided here to learn and do it yourself. List provided here is just for your crosschecking. Open the media section of our Telegram channel and scroll back to see screenshots from various members of this channel, see how much profit your fellow traders in this channel are earning with the same Strategy. Screenshots are just to motivate you and to give you confidence. It is from fellow members of this channel, there is no paid tips or paid trainings behind it. I stopped posting screenshots as lot of small players gets tempted looking at profits others are getting by trading in futures.

Check the description section of the video in YouTube to download scanners and calculators used/mentioned in the video. If you have any questions, leave it in the comments section of the video.

If you have taken up the assignments mentioned in the YouTube video, post the results in the comments section of the video every week or email it. 

Remember, You are awesome and Can Do It.! Just believe in yourself👍

Market Secrets - Where should I start?

Welcome to Market Secrets Trading family.!

We are very different from all the telegram channels out here. We don't provide any update during Live Markets. So go through this post fully to understand what we offer.

Why can't you provide live updates? 

2 Reasons:

1. We(Admins) are also traders and we need to have full focus on the terminal. Also, providing live update is a distraction.
2. What is the point in giving live updates if we can provide the exact levels which we will be using for trading even before market opens. Anyway, we will be using same entry and arget during live market. So there is clearly no need to give live updates. Moreover, we don't believe in making you wait for SL/Target after giving you an entry point. You should know everything about the trade before you get into it and that's why we don't provide any live updates.

How am I supposed to trade without live updates?

Just follow the levels published in the channel for Index & Stock Trading. We are using the exact same levels ourselves.

What do you offer on daily basis?

1. We provide precise Index Trading Levels for Nifty & Bank Nifty on daily basis which can be used for Future/Options trading directly
2. We provide 4 stocks for Intraday Trading with proper SL & Target.

What is the purpose of listing down the stocks under 52 Week High Low Category?

We have published a free intraday/positional trading strategy using 52 Week High Low Data. It is available in YouTube for everyone to Learn & Trade. If you are looking for mastering a strategy, I would suggest to try this out. Purpose of listing down the stocks under 52 Week High Low Category is to ensure that whatever list you have prepared yourself based on this strategy matches with my list. This is published everyday to ensure that the list you have is the right one.

What else does your Team offer through telegram?

1. We publish monthly levels file at the beginning of every month. Basically this file will have list of all the FNO stocks and their positional trading levels for that particular month. If you are a positional trader, this file is your treasure. More than 1000 people are already using this file on daily basis.
2. We provide multibagger intraday option calls occasionally as well.

What does Market Secrets offer when it comes to Learnings?

We have already had 3 Live Webminars through YouTube to explain and discuss about various strategies we have shared so for. We have shared our strategies on Intraday Trading in Cash/Futures, positional trading using monthly levels file and various option strategies for regular and consistent profits. All these have been shared through our YouTube channel and it is completely free for everyone. All you need to have is the patience to learn and practice the strategies.

We are working on publish few other strategies as well, so subscribe to our YouTube Channel and BELL icon, so that you will get invitation and alerts for all our Live Sessions/new uploads.

YouTube channel link: https://www.youtube.com/c/MarketSecrets

Where should I start?

Go through our YouTube channel, pick one Strategy that you like and watch that video again and again until it becomes a second nature to you. Focus  only on that Strategy for next few months, we assure you that you will succeed definitely.

Links:

Market Foundation:

If you are totally new to the channel (or trading as such) and clueless on where to start with your learnings - watch these 2 videos first. It basically covers everything you need, it would take 45 minutes totally but it's very very important. 

https://youtu.be/oDMsD1FEh4U

https://youtu.be/MbQRnde9WSc

Trading is easy, Trade less, earn more is our Mantra. Discipline contributes 75% to your trading success whereas strategy contributes only 25%. If you want to be a successful trader, learn to be a disciplined trader first. 2 videos mentioned above serves this purpose.

Importance of Positional Sizing: https://blog.marketsecrets.in/2018/01/positional-size-calculator.html

Trading Management Tracker: https://blog.marketsecrets.in/2018/02/trading-management-tracker.html

Rules for trading the 4 stocks published in the channel on daily basis:

https://blog.marketsecrets.in/2018/04/monthly-levels-file-april.html

Intraday Index Trading:

If you want to trade on Index (Nifty/BankNifty) based on the sure-shot levels posted in the channel on daily basis, learn it now from here: https://youtu.be/f1EnPYRPlg4

52 Week High Low Strategy:

Learn Cash Trading based on 52 Week High Low Strategy & take trades independently.

Learn it now: https://youtu.be/bxaxIkJjBkM

Any doubts on this strategy?

Watch Q&A Session: https://youtu.be/iqvoVPXZYjQ

Rules for Positional Trading Strategy using 52 Week High & Low:

https://blog.marketsecrets.in/2018/02/52-week-high-strategy.html

Rules for Intraday Trading Strategy using 52 Week High & Low

https://blog.marketsecrets.in/2018/02/easy-intraday-trading-strategy.html

Rules for Intraday Trading Strategy using Modified 52 Week High & Low

https://blog.marketsecrets.in/2018/05/monthly-levels-file-may-2018-updated.html

Positional Trading:

Strategy for positional trading in Futures/Options - Monthly levels file Strategy.

Learn it now: https://youtu.be/MbQRnde9WSc

Monthly levels file for every month is available in the below link for download: 

https://blog.marketsecrets.in/2018/04/monthly-levels-file-april-update-1.html

Options Trading:

If you are interested in learning options and wants to trade like a pro in options, especially Bank Nifty weekly expiry, learnt it from here right now.

https://youtu.be/CaYcnViPVOk

https://youtu.be/XogOdJ3-5kw

https://youtu.be/7ryMmJrnI50

Blog Links on Option Trading:

Option Trading - Basics and Strategies

https://blog.marketsecrets.in/2018/02/option-trading-strategies-training-ppt.html

Option Max Pain Theory - How to use it for maximum gains?

https://blog.marketsecrets.in/2018/03/max-pain-calculator.html

Bank Nifty Weekly Expiry Option Trading Strategies

https://blog.marketsecrets.in/2018/03/option-trading-strategies-and-bank.html

How and Why Max Pain changes/moves?

https://blog.marketsecrets.in/2018/04/how-and-why-max-pain-changes-on-expiry.html

To Reiterate: 

We won't provide any live updates during market hours. Nifty, BankNifty levels and stocks to trade for the day will be provided even before market opens. Watch the video link provided here to learn and do it yourself. List provided here is just for your crosschecking. Open the media section of our Telegram channel and scroll back to see screenshots from various members of this channel, see how much profit your fellow traders in this channel are earning with the same Strategy. Screenshots are just to motivate you and to give you confidence. It is from fellow members of this channel, there is no paid tips or paid trainings behind it. I stopped posting screenshots as lot of small players gets tempted looking at profits others are getting by trading in futures.

Check the description section of the video in YouTube to download scanners and calculators used/mentioned in the video. If you have any questions, leave it in the comments section of the video.

If you have taken up the assignments mentioned in the YouTube video, post the results in the comments section of the video every week or email it. 

Remember, You are awesome and Can Do It.! Just believe in yourself👍

Intraday Trading Strategy using Modified 52 Week High & Low

As a Team, Market Secrets is growing big and strong. Proof for that is visible on the ground, as lot of our fellow members are customizing our strategies to suite their style of trading. One such customization of 52 Week High Low Strategy is presented here. All the credit for this strategy including documentation goes to Pradeep, one of the dedicated members of Market Secrets.


Modified 52 Week High Low strategy by Pradeep

Rules:-
1. If stock is filtered for 52 week High then you will SELL the stock.
2. If stock is filtered for 52 week Low then you will BUY the stock.

SELLING RULES:-
 Timeframe is 15 min chart type is candlestick.
 SELL the stock at the LOW of first 15 min candle.
 Stop loss will be HIGH of first 15 min candle.
 Target will be 1% and you can trail the stop loss till 5% moment.
 If stock never reaches LOW of first 15 min candle IGNORE script DON’T TRADE.

BUYING RULES:-
 Timeframe is 15 min chart type is candlestick.
 BUY the stock at the HIGH of first 15 min candle.
 Stop loss will be LOW of first 15 min candle.
 Target will be 1% and you can trail the stop loss till 5% moment.
 If stock never reaches HIGH of first 15 min candle IGNORE script DON’T TRADE.

Sample trades from 27th April 2018. Stocks filtered are:-
ASHOKLEY (SELL):- Gave profit.
BALRAMCHIN (BUY):- Gave profit.
HINDPETRO (BUY):- Gave profit.
INFRATEL (BUY):- Gave profit.
JSWSTEEL (SELL):- Gave profit.
M&M (SELL):- NOT Executed.
M&MFIN (Sell):- Gave LOSS.
PCJEWELLERS (BUY):- NOT Executed.
RNAVAL (BUY):- Gave LOSS.
SRF (SELL):- NOT Executed.
TATAELXSI (SELL):- Gave Profit.
TCS (SELL):- Gave profit.

SELLING Stock example:-

BUYING Stock example:-

Market Secrets Professional Traders Program

What is Market Secrets Professional Traders Program?
Market Secrets Professional Traders Program (PTP) is a learning course launched by Market Secrets Team in May 2018. It is a paid program, which focuses on building disciplined, independent & successful trading community. To put it in simple, at the end of the PTP program, you will be able to generate all the trades that we have shared in our Channel so far totally on your own.

What is Covered in the PTP Program?

1. Daily Index Trading Level calculation
2. Filtering 4 stocks for daily intraday trading
3. Calculating trading levels for the filtered stocks
4. Monthly levels file preperation
5. Option Trading using the file
6. Banknifty weekly expiry strategy for consistent profits
7. Excel based automation tool to identify bank nifty weekly expiry trades easily.

How and Why Max Pain changes/moves?

Max Pain Theory:

The theory of options pain stems as a corollary to the belief – “90% of the options expire worthless, hence option writers/sellers tend to make money more often, more consistently than the option buyers”.

Now if this statement is true, then we can make a bunch of logical deductions –

1. At any point only one party can make money i.e either the option buyers or option sellers, but not both. From the above statement, it is clear that the sellers are the ones making money.
2. If option sellers tend to make maximum money, then it also means that the price of the option on expiry day should be driven to a point where it would cause least amount of loss to option writers.
3. If point 2 is true, then it further implies that option prices can be manipulated, at least on the day of expiry.
4. If point 3 is true, then it further implies that there exists a group of traders who can manipulate the option prices, at least on the day of expiry.
5. If such a group exists then it must be the option writers/sellers since it is believed that they are the ones who make maximum money/consistently make money trading options.

Now considering all the above points, there must exist a single price point at which, if the market expires, then it would cause least amount of pain to the option writers (or cause maximum amount of pain to option buyers).

If one can identify this price point, then it’s most likely that this is the point at which markets will expire. The ‘Option Pain’ theory does just this – identify the price at which the market is likely to expire considering least amount of pain is caused to option writers.

How to calculate Max Pain/Option Pain:

1. For each strike prices, calculate loss to option sellers on calls and puts side if the stock or index expires at that particular strike price
2. Add the value of loss from calls and puts side, which is called as Max Pain Data
3. Now the strike with Minimum value will be your Max Pain/Option Pain Strike and that is where the stock/index will expire.

You don't have to do the calculation manually, You can download the option pain calculator from the description section of the below video in youtube.

Why Max Pain Moves?
So whenever Open interest changes, there will be change in the pain value. If there is a significant change in open interest, then max pain will shift from one strike to another. Watch the video for more detailed information.

Watch our YouTube videos at https://www.youtube.com/c/MarketSecrets to learn how to trade options & how to use Max Pain data to take positions.

Need help in becoming a professional and an independent trader? Want to trade options like a Pro? Then, Contact us at https://t.me/MarketSecretsTeam through telegram or Email us at marketsecretsrevealed@gmail.com

Monthly Levels File - 2018

Monthly Levels File - 2018

Monthly Levels File for the year 2018 will be available for download from this blog post.

Regular Monthly Levels File for July 2018:
https://drive.google.com/open?id=1xSr_vBY1rlHtPYHedavfHPO_qgnQZ4Tn

Regular Monthly Levels File for June 2018:
https://drive.google.com/open?id=1q6adx_uPyBRxTmVGSZPiCa0EvnCGU8RL

Regular Monthly Levels File for May 2018:
https://drive.google.com/open?id=1guwe4kxSiBDe5_y1vOwSIMoC2446DhEm

How to use Monthly Levels File.

1. Select 5 to 10 stocks from the list of 210 stocks available in the FNO stock list.
2. Track the EOD price of those stocks by comparing it with the levels provided in the Monthly Levels File.
3. Take Long position in the stock if the stock closes above +1 level mentioned in the file.
4. Targets for this long position is +2 & +3, whereas SL can be set at 0 or -1 based on your risk taking ability.
5. Take Short position in the stock if the stock closes below -1 level mentioned in the file.
6. Targets for this long position is -2 & -3, whereas SL can be set at 0 or +1 based on your risk taking ability.
7. +4 & +5 will be your immediate resistance (or trend reversal points) on the long side, where as -4 & -5 will be your immediate support (or trend reversal points) on the short side.
8. Levels 6,7 & 8 acts just like levels 1,2 & 3.

Note: Remember, the file has Stock Future price, if you are taking position in cash, you need to do the price adjustment manually.

Rules for using Intraday Cash Trading Levels

Intraday Cash Trading Levels:

Due to lot of requests, we have started posing Intraday Cash Trading Levels in our telegram channel on daily basis. These levels are not trading recommendations but the ones that I personally use for my trading on daily basis, so I'm sharing the same with you. You should do your own research on it before taking the trades.

We post the trading levels even before the market opens for the day and we follow the levels very closely. If you are going to trade based on our levels, then you should follow the rules mentioned below to real full benefits

1) All Levels are cash Trading levels, don't ever use it for Trading in Futures.

2) Don't enter any trade before 9.20 AM

3) Use 5 Minute Candlestick chart for entry and exit. 

4) Enter long if 5 minute candle of the stock closes above the long Entry price (use 3 min candle between 9.20-9.45 AM)

5) Enter shorts if 5 minute candle of the stock closes below the short Entry price (use 3 min candle between 9.20-9.45 AM)

6) SL should be 5 Minute candle closing below SL level for longs and closing above SL level for shorts.

7) Trail SL to cost when stock moves to Target 1, change SL to Target 1 when price moves to Target 2 and so on

8) If target 2 is hit and if price comes back to entry level, re-enter afresh. You can re-enter same levels any number of times.

9) Stop re-entry when the script hits SL. Eg: if long side of the script hits SL during first trade or during re-entry, never enter that script on long side again throughout the day. But you can enter at short side, if the level comes.

10) Always follow same positional sizing throughout the month, use our sizing calculator without fail. Also capture all the trades in your trade log.

Note: Words highlighted in BOLD are very very important.! 

As always, paper trade the script for a week or 2, so that you can clarify if you have any queries. Don't ever play with real money, I don't like losses, even if it is one rupee.

Watch our YouTube videos at https://www.youtube.com/c/MarketSecrets to learn more about trading strategies.

Need help in becoming a professional and an independent trader? Then, Contact us at https://t.me/MarketSecretsTeam through telegram or Email us at marketsecretsrevealed@gmail.com

52 Week High Low and Monthly Trading Levels File - Automated Sheet

Automation:

As we move forward, technology is advancing very fast and everything in the world runs on Automation. Same is applicable for trading as well. Almost 70% of trades in Indian market are done using Bots/Robots. Everything from trade analysis to trade log is done through automation. 

52 Week High Low and Monthly Trading Levels File - Automated Sheet

To help us in reducing the work spent on daily basis, one of the fellow members of our telegram channel (Mithun) had come-up with an excel based automation script which will basically simplify your job when it comes to filtering the stocks for 52 Week High/Low Strategy (or) Utilizing monthly levels file.

You can download Automated 52 Week HL and Monthly Trading Levels using the below link.

Automated Monthly Levels File for March 2018: https://drive.google.com/open?id=1iG1iMQ2Ppoq-8wkx1TgyoElKhVyurosV

Additional Features added from April 2018:

1. Capital management for 52 Week HL Strategy
2. Added buttons for Monthly levels file filtering.

Automated Monthly Levels File for April 2018:: https://drive.google.com/open?id=1Yc2A7vlrEoU2sPyWQf_Xi5tvWpHUCBEZ

Automated Monthly Levels File for May 2018: https://drive.google.com/open?id=1TtR8wyXjxMl5trD8GYJl74ohpL9y5e0S

Automated Monthly Levels File for June 2018: https://drive.google.com/open?id=1EZ1FQmcVgmPfX7JwyZqSjOBbBW8bDvwV

We are discontinuing Automated Monthly Levels File from July 2018, regular monthly levels file will be available for download in the below blog link going forward.
Link: https://marketsecretsrevealedforyou.blogspot.com//2018/04/monthly-levels-file-april-update-1.html

Watch our YouTube videos at https://www.youtube.com/c/MarketSecrets to learn more about trading strategies.

Need help in becoming a professional and an independent trader? Then, Contact us at https://t.me/MarketSecretsTeam through telegram or Email us at marketsecretsrevealed@gmail.com

Bank Nifty Weekly Expiry Option Trading Strategies

Agenda of Live Session on Option Strategies and Bank Nifty Weekly Expiry Trading Trick


Agenda:
1) Key Points
2) Brief overview about previous session
3) PCR – Intraday analysis
4) Max Pain – More info
5) Option Selling – Weekly income – Intra/Positional
6) Option Selling – Monthly income
7) Payoff generator
8) Option buying – BNF Weekly expiry
9) Option Hybrid strategies
10) Assignments

All the links used as part of the session is available in the PPT.
Download the PPT from here: https://drive.google.com/open?id=1W1PVEn5y09hUWBs7p6ySJD-oGULFTbgS

Download sample assignment report:
https://drive.google.com/open?id=1ZBpYCLpr-dbm5EYkkPtLDkc59Jyu65pW

Download options pain calculator:
https://drive.google.com/open?id=1z02Xt8Xq887Ok2CY9RNwgoLw35zBB7ZY

Option Trading Mistakes that you should avoid:

Lack of understanding options: Many traders jump into option trading without really understanding the reasons behind the movement of options or the maths behind it. Little attention is paid to details like how much does an option move with respect to the underlying share or index, the Greeks that are used for calculation of option prices. Generally few traders know which strike price will offer the best risk reward trading opportunity is case of a small move or large ones.

Going for Jackpots: The beauty of trading in options on Expiry is that you enter in a highly leveraged position with a limited downside risk scenario as the premium paid is the maximum loss which is also cheapest due to almost negligible time\other values in option premium. This may look like a jackpot, but it is like a lottery. You will never win at the end.!

Buying out-of-the-money options: Lack of understanding options results in retail traders buying options which are out of the money for the simple reason that they are cheap. An occasional win trade results in the trader getting fixated to buying out of the money options. In most cases even when the trader is right in his trade he loses money in the out-of-the-money trade since it requires a very sharp and fast move for these options to become profitable. It has been found out that trading in out of the money options is one of the biggest reasons for option trader loses.

Not having an exit plan: Traders lose money because they do not know when to exit from an option position even if they are right. The fact that holding on to a position as time passes, erodes the value of the option is rarely understood. Similarly since the amount involved in options is small traders do not trigger the stop losses. They tend to hold to the trade in the hope that a move in their direction will result in a profitable exit. Ones an option goes out of the money as the underlying stock or index moves away from it, it would require a big move for it to come back to its breakeven level. 

No clue of an event calendar: Option prices tend to over-react when an event is approaching. Investors read the rising value in options as a sign of a big move in its direction.

Writing options without proper risk management: Many times novice trader tries to behave like a professional trader and gets in the act of writing option where returns are limited while risk is unlimited. But he imitates the pro only partially. While a professional trader is either properly hedged in his position or keeps an iron tight risk management system of stop losses in case of a move against his position, a retail trader leaves his option writing position open. It just takes one wrong trade in this direction to wipe out months of gains for the trader. 

Lack of understanding of time decay: Another big factor that plays against a retail trader is lack of understanding of time decay on option prices. For as option price to rise the underlying stock or index needs a move in line with the option bet and fast. A grinding move plays against the buyer of an option. As time passes options lose value faster. Many retail traders hold on to their trade or take new bets close to the expiry of the market, because option prices are cheaper during this period. But most trades close to the expiry period turn out to be losing ones, unfortunately a novice trader holds on to his position since the amount involved is small. It’s these seemingly small loses are what cause the most damage to a novice trader.

Need more information on option trading? Watch our YouTube videos at https://www.youtube.com/c/MarketSecrets to learn how to trade options & how to use Max Pain data to take positions.

Need help in becoming a professional and an independent trader? Want to trade options like a Pro? Then, Contact us at https://t.me/MarketSecretsTeam through telegram or Email us at marketsecretsrevealed@gmail.com

Option Max Pain Theory - How to use it for maximum gains?

What is “max pain” in options trading?

Options Max Pain Theory suggests, “On option expiration day, the underlying stock price often moves toward a point that brings maximum loss to option buyers.”

It’s a well-known fact that most options trading volume is made up of hedged positions from large institutions. Hedge funds, prop funds, FII’s, DII’s, pension funds - they all hedge their large positions using options and make up most options trading volume.

Since these institutions have so much money on the line, it makes sense for them to try to manipulate (move) markets to their advantage - if they can.

How would they do this?

Well, what if it turns out that if the Index closed at a certain price on expiry day, hedge funds/institutions would stand to benefit tremendously - doesn’t it make sense that hedge funds will try to move the Index in order to maximize their gain (and maximize your loss/pain)?

Understanding Max Pain

So we know that the theory stems from the idea that large institutions will attempt to move the Underlying to a certain price in order to maximize their profits.

The natural next question, is, what price do they move it to, and why? In order to get to that, you need to understand an important fact.

Most Options Buyers Lose Money

Mostly due to a concept known as time decay, most options buyers lose money. It doesn’t matter whether you’re buying a call option or a put option - due to time decay, you’re probably going to lose money. In India, around 90% of Options buyers don’t make money.

Since we have established that institutions are writing (selling) options, they’re profiting - but in order to maximize your pain, they want you to lose the maximum amount of money.

In the Money, At the Money, and Out of the Money Options

In order for an Option buyer to profit, the option needs to expire ITM (in the money). If the option expires At the Money or Out of the Money, the Options buyer will not profit.

Since institutions want you (the Options buyer) to lose money, they want to minimize the number of options contracts that are In the Money.

Therefore, they are looking to maximize the number of contracts that are ATM and OTM.

So, order to get to Max Pain, institutions will move the underlying towards a strike price wherein they can get the maximum number of contracts (measured through Open Interest) that do not expire ITM.

How to use Options Max Pain Calculator Excel Sheet:

1) Download and save the file in your machine.

2) Open the Excel file, if there is any request for "Enable Editing" or "Enable Content", Click that and provide access as described in the video.

3) To calculate max pain, move to Data tab at the top and click refresh.

4) Whenever you need current data, click refresh.

5) Refresh needs to be done separately for Nifty & BankNifty Data by keeping that particular sheet opened.

Link to Download MaxPain Calculator: 

https://drive.google.com/open?id=1z02Xt8Xq887Ok2CY9RNwgoLw35zBB7ZY

Watch our YouTube videos at https://www.youtube.com/c/MarketSecrets to learn how to trade options & how to use Max Pain data to take positions.

Need help in becoming a professional and an independent trader? Want to trade options like a Pro? Then, Contact us at https://t.me/MarketSecretsTeam through telegram or Email us at marketsecretsrevealed@gmail.com