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[WHAT IS OPTION TRADING]

Hello Traders, Option Trading is a type of Trading which can give you a very high profit but also a very high loss if you analyze the market properly with indicators and price action and follow risk management then you profit making chances are high. But if you don’t follow it your loss making chances are high.

So today I will be discussing about Option Trading and to doing it wisely during the trading hours.

Q) What is Option Trading?

Ans) It is type of trading where traders buy and sell options. The buy is known as CALL. CALL is buy when market is in bullish or uptrend or going up. PUT is buy when market is in bearish or downtrend or going down. In this trading you can earn a lot of profit and also you can have a lot of loss. Therefore, it is a risky trading. If you want to earn a short-term profit then go for option trading with proper risk management and technical analysis. But if you can wait for a long time then go for investing. There is a expiry date of every option that is Thursday coming. If there is holiday on coming Thursday then the next Thursday will its expiry date.

Q) How to buy and read Options?

Ans) Many traders do option trading in Nifty and Bank Nifty. If you want to trade in Bank Nifty then first see its current price imagine it is 35000Rs. Now your technical analysis tell that Bank Nifty will go up by 200rs then search bank nifty 35200. Imagine its expiry date is 5th march. So you will find a option BANKNIFTY5TH MAY 35200 CE. Now add this and buy it according to your available margin.

Now your technical analysis tell that Bank Nifty will go down by 200rs then search bank nifty 34800. Imagine its expiry date is 5th march. So you will find a option BANKNIFTY5TH MAY 34800 PE. Now add this and buy it according to your available margin. You can minimize your loss by putting stoploss.

Some advice during option trading

If you are making profit then make a target that at this price when market will reach I will sell my option. Many traders wait if the market go above their target and then suddenly market reversed after touching its day highest for CALL and day lowest for PUT and usually Traders have less profit then their target or have loss. So never do greed in trading make a target. Sell your option when your target is archived. And then close your setup because if you see it constantly you will have a thinking in your mind that I can make more profit and then you again enter the market and end up with less profit or even loss.

Do not enter the market again if you have a loss in your first trade thinking that you will cover the lass and make profit this can lead you to make more loss. Enter only if you are very confident with your technical analysis.

If you have a large money only trade with 70% or 80% or 90% of your money. Don not ever trade with your full money. Because imagine you have made a small loss so you can cover it on next trading day with your rest money. if you have made a big loss then don’t do trading for 2-3 days. first analyze the market carefully, learn more, understand your mistake and with full confidence do trading. Do not revenge trading for your loss. Do not enter the market after your 2 stoploss are hit. Always trade with stoploss.

BE HAPPY EITHER YOU HAVE MAKE SMALL PROFIT OR SMALL LOSS BECAUSE IT IS NOT THE LAST DAY OF YOUR TRADING

I WILL ALSO POST THE BLOGS ON HOW I TRADE DURING MARKET AND MY STRATEGIES

DISCLAMIER:

It is only for educational purpose which I have studied and test in the market. Any decision you take during the market is your own responsibility.




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