narenmt Mr. Narendar’s investment experience spans over 8 years during several Bull and Bear market cycles. He has personally and actively traded in NIFTY futures and options, shares. All through the years, he was in business; he traded the stock market and has built a great deal of those experiences into his current trading philosophy & trading strategy. One important feature of a successful trader is to understand, what in the real world, it takes to earn a rupee. Should you require the services of an experienced trader who is able to provide invaluable and detailed mentoring services to assist you in developing your trading skills, I would suggest you contact him to discuss whether his mentoring service would suit you. Narendar has been certified by “The Options Institute” (Chicago Board Options Exchange). He has also completed NSE’s Certification in Financial Markets (Options Trading Strategies Module).

Earning Profits with the Use of Non Directional Trading Strategies -1

1 min read


Dear readers,

I would like to thank all readers of this blog for your mails and calls. I am very grateful to Rajandran of Marketcalls.in for his support. In today’s blog, I will divide trading into two basic categories: directional and non-directional and discuss about using non-directional to make profitable options trading.

 

If you have been trading for a long time, you may know it’s very difficult to predict market. I remember a wonderful quote by Louis Navellier, “Just when you think you are smart, the market will show you just how really dumb you are.”  I would like to highlight another quote by William Bernstein, “There are two kinds of investors, be they large or small: those who don’t know where the market is headed, and those who don’t know that they don’t know. Then again, there is a third type of investor – the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know.”

Directional trading: Example: A traders after making detailed technical analysis(Gann, EWT, candle-stick, etc) and buys NIFTY future expecting the NIFTY to bounce above the cost price, reach target and finally book profit IF NIFTY has bounced as predicted. One more trader who also had done detailed technical analysis (Gann, EWT, candle-stick, etc) and predicted that NIFTY would fall, shorts NIFTY future expecting NIFTY to fall below short price, reach target and finally book profit IF nifty had fallen as predicted.  These are speculation trades.          One can lose huge money in this kind of speculative activity of predicting and trading if he is not managing his risk properly. Market can go expire anywhere above 5200, between 5200 and 5000, or below 5000 or 4600. Predicting where the NIFTY will expire is a difficult task for many of us. On the other hand predicting where the NIFTY will not go is a much easier task that predicting the direction. Non Directional Trading is about making money predicting where the market will not go. Ask yourself, which is easier, to predict where the market will go or to predict where the market won’t go?

Following is the list of non-directional option strategies which works without predicting market direction or neutral option strategies

  • Bear Put Ladder
  • Bull Call Ladder
  • Calendar Spread
  • Guts
  • Long Box
  • Long Call Butterfly
  • Long Call Condor
  • Long Call Synthetic Straddle
  • Long Iron Butterfly
  • Long Iron Condor
  • Long Put Butterfly
  • Long Put Condor
  • Long Put Synthetic Straddle
  • Short Call Butterfly
  • Short Call Condor
  • Short Guts
  • Short Iron Butterfly
  • Short Iron Condor
  • Short Put Butterfly
  • Short Put Condor
  • Short Straddle
  • Short Strangle
  • Straddle
  • Strangle

To be continued….

Narendar Rathod, Options strategist, www.AssuredGain.com

Trade Wisely & Relax

narenmt Mr. Narendar’s investment experience spans over 8 years during several Bull and Bear market cycles. He has personally and actively traded in NIFTY futures and options, shares. All through the years, he was in business; he traded the stock market and has built a great deal of those experiences into his current trading philosophy & trading strategy. One important feature of a successful trader is to understand, what in the real world, it takes to earn a rupee. Should you require the services of an experienced trader who is able to provide invaluable and detailed mentoring services to assist you in developing your trading skills, I would suggest you contact him to discuss whether his mentoring service would suit you. Narendar has been certified by “The Options Institute” (Chicago Board Options Exchange). He has also completed NSE’s Certification in Financial Markets (Options Trading Strategies Module).

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8 Replies to “Earning Profits with the Use of Non Directional Trading…”

  1. Dear Sir,

    i think most of the people know all this theoretical stuff.

    The main thing to decide is whether we should go for directional trade or Neutral one!!! If we assume directional mkt then this neutral strategy will be waste and if we assume neutral then this directional strategy will be waste.

    Wat i wanna say is that people don’t want all this theoretical stuff(from books).

    So plz be realistic and post accordingly. But i really wanna praise Narender Sir & Rajendran Sir for this platform & their analysis.

    Thanks & carry on this gr8 work……

  2. May I put a request to the writer. If I appear critical, please forgive. All these strategies are available on Net, NSE and CBOE have also some great literature. Important for us is that you present a live practical example of one, say only one strategy to execute on eod basis – say once a week and then with practical live examples build up the education series. Most of the above are not applicable to Indian situations considering we hv liquidity in current month only. To begin, you may post one strategy we may use on opening of trade coming Monday March 8; and explain it thoroughly entry, exit, beak even, etc. Thank You.

  3. i wrote the first comment here few days back.

    but moderators , i think, didn’t like to allow it to publish here because i criticized some points here. So we have to always praise here and then only our comments will be published.

    i was not expecting this from moderator like rajendran!!!!!!

    i think this comment will be again ignored!!!!

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