The 4-Indicator System for Option Buying | Ft. DD Nifty

I want to know this one thing. How are you consistently profitable just by using indicators and trading based on indicators? Since last 5 years, most of the people are losing because of these five reasons. First mistake is they will be always against the trend. So I don't use all the 14 indicators on one system. There are like hundreds of candles on this chart. How do you define which candle is your entry? You want to take a entry on a normal candle or a super candle? >> My first question is what is super candle? Okay. See like the super candle is if we have 100 people who are like 5 ft. Okay. Like is it possible for everyone to cross a 6 ft wall? >> Not really. >> And if it is like a 9 ft wall >> possibly nobody but maybe one or two >> maybe one one maximum. Okay. So like similarly this is our entry candles. I don't trade with 80. I have a special strike selection mechanism. You can just see over here a 15 lakh rupees of net profit over here. One trade has contributed for 4 lakh 41,000. I don't have a winning probability of 80%age 90%. I have only 40 to 45%age of winning probability. Winning probability is just a number. >> Correct. >> Okay. The risk appetite is the most most important. Whenever the market is sideways, they give a lot of false trades. How is this system catering or how is the system solving that problem? >> If we start to practice this, then I hope like you can understand it in a very proper. >> So let's practice this. Okay. All right, another day another podcast on upsurg an arhan and today we have a very special very popular trader with us today Mr. Darin Dharan, founder of the simple trade and of course a trader with over a decade of experience almost a decade of experience a option trader and a very popular mentor. Hi sir, welcome to the search podcast. >> Thank you. Thank you. Thank you so much. >> So I'm going to start with a statement and I can guarantee majority of the audience will leave this podcast right now. >> Okay. [laughter] You said something that I trade purely based on indicators. >> Yes. Yes. Obviously >> right now I know the comments are going to come indicators never work they are all lagging and and you know indicators loss all that see that is going to come for sure I want to know this one thing how are you consistently profitable just by using indicators and trading based on indicators since last 5 years so all the viewers who are watching this video so we have the recent sebi report that states that 93% of the people are option buyer out of that 90% of the people are losing The same will be for this video as well. >> Okay. >> The viewers who are viewing this maybe it goes for one lakh or 10 lakh views. 93% of the people will be an option buyer. >> So for all the option buyers I say like one thing you guys might have done with different analysis like whatever the analysis you told right >> that's going to be different and for each and every people who are following it one will say Paraju will say this is buy and Ramu will say this is sell. >> Okay. Okay. So there will be like discretionary uh there will be lot of discretionary between that >> but whenever it comes to indicator for Raju Rau sur you name anyone it's going to be the same value if the super trend is going to show you an uptrend it's going to be an uptrend okay it's not going to say like someone will say no it's downtrend so I will definitely showcase today that by end of this session all the viewers will have their one answer at one entry so someone will not say it's by someone does not say it's sell everyone will say it's a buy >> Huh that's that's very true sir that indicators will showcase the same value same data to everybody yes >> the interpretation can be different but the data or uh the the indicator will show the same uh data for sure um on every screen but ultimately sir it all comes down to profit >> right if you are able to make the profit uh that thing is good that strategy is good that indicator is good if If you're unable to do that then it's it's of no use even if you get the same data if everybody's making the same mistake then of course you are into that everybody's part which is the 90% part right and that is where people uh have this disbelief in indicators how are we establishing that belief back into the indicators >> see uh there are like various indicators over here >> correct thousands actually >> exactly so but we need to select like one indicator and what's the purpose for that indicator to be on the system. See, it's not like one indicator. If you're using one indicator, I'm very sure you're not going to make money. >> Okay? >> So, we need to have a couple of indicators which will join together and will constitute a uh execution result. Okay. So, if all these three indicators come with a plan and now you say like this is going to be a buy or this is going to be a sell. So, it's not like one individual indicator we are going to speak over here. >> Understood sir. and and this indicator part is actually very controversial and I would love to see the P&L that you have uh generated the money that you have created with the same strategies that you actually uh pitching right but before that as you said 90% people and 93% are the option traders all of them are losing money what do you think are the biggest reasons according to you that every option trader I can say every because 93% are losing money that means out of 10 at least line are right why every option trader is losing this >> see like most of the option buyers right they do five common mistakes because I spoke with lot of retail traders and understood these are the five mistakes what they personally have >> okay >> and the first mistake is they will be always against the trend >> okay >> okay so the market will be downtrend during that time they would have bought a call options thinking that the market will get reversed >> and the next one is the they will get an entry okay the like before they take the entry condition right the market would have gone one up 1% up or 1% down >> after they enter right there will be no momentum in the market. >> They will the premiums will never move. >> Second is delayed entry. >> Yeah. Uh it's not like delayed entry the momentum the momentum in the market. >> Okay. >> Okay. So the third one will be the the market structures. They will the like most of the time the retail traders right they will find out the the peak the high of the uh of the script >> and they will not buy the put option. They would have bought the call option over there. That's the third point like what I've seen. And the fourth point is the this is very common with the people who go for office. Okay. They they just see the chart on the tea break or the lunch break. They give all the conditions satisfy on that candle and then they will take the trade. >> Yeah. >> Okay. And >> hoping it'll just go. >> Exactly. So that's the that's the worst thing. So these are the fourth mistake. And the fifth mistake is a stop-loss. Obviously the people will not trial the stop- loss on the positive side. They will trial it on the negative side. So these are the five mistakes like what I personally seen with the option traders who are failing in the options mark option buying market. >> Okay. And how are we fixing this problem? Uh specifically using indicators. >> See like today we will definitely learn how to fix all the five issues >> with a simple system. >> Okay, which is having like just four indicators with it. >> Okay, >> and all the five problems will be solved today. Um, so we were talking off camera and I'm sorry to bring this up uh in the podcast but you said key you look at 14 different indicators. Yes. >> Right. How are we narrowing it down to four indicators? >> See like uh the four indicators whatever I say right so that's the base for the option buying systems. Okay. >> Okay. See you may be you may have any strategy. >> Okay. You may be having some price action systems but the base what I'm going to teach today on top of which if you put your option strategies >> okay or if you have any price action system or any uh any system based upon OA or what are the strategies you follow right you can put it on this top of this so similarly I told the 14 indicators are there right so I don't use all the 14 indicators on one system >> okay >> okay so the base is built with only the four system the four indicators >> h interesting sir And I think I'm also very curious to understand uh the logics and the setup. So let's start with that sir and then I'll have some more questions for you. But let's learn the setup first. >> So like we will just start with the setup and a small note to all the retail traders who are watching. See like I'll be explaining you guys with the life uh the life examples. Okay. It be like very easy for you to correlate with the things. Okay. So like everyone would have been to uh mall and would have used the escalator. >> Okay. See like whenever the escalator is going to take us to the next floor. Okay. So then we just need to stand on the on the base then it will take us to the first floor. >> Correct. >> Okay. And if the if the excavator is coming down right >> and if you want to go to the first floor and you are going to climb it you need to put lot of effort. >> Correct. >> And even you put a lot of effort it will come it will just bring us to the ground once again. >> Right. >> Similarly in trading we are going to do it. >> Okay. So the first thing is uh the the first thing is we are going to use the super trend over here. So I just add the super trend indicator. Now we can just see the super trend indicator is added with a default settings of 10 comma 3 super trend. >> Yes. >> Okay. So now uh like we just defined the trend with the super trend. Mhm. >> Whenever the candles are having say like uh whenever the candles are above the super trend level, we just say it's an uptrend. >> Correct. >> Okay. So whenever the candles are below the super trend, we just say it as downtrend. >> Correct. >> So here we don't have something like sideways sideways to trend sideways to downtrend. It's just a escalator. >> Okay. >> Okay. So whenever it is going up, it's just going to travel along with it. That's it. Nothing more. So the trend identification is very simple right now. So you don't need to worry anything about this. Okay, this the first thing is done. The next one the the next problem is the momentum. That's what I told right. >> So uh see like what happens is uh let me just connect once again with the real life example. Okay. So we are going to run a 100 m uh dash. Okay. So on that what happens is uh like uh first person is standing on the start line. >> Correct. >> Okay. He's yet to start but there is another person who is 50 m away. >> Okay. But still he is running on his full momentum. >> Okay. >> Can you guess who will win it? >> The second person. >> Obviously second person because >> the first person will have to start and then he'll get the he'll catch the momentum and meanwhile the person who's already in the momentum he'll just take over the first person. >> Exactly. So that's the same thing we are going to use in our charts as well. >> Okay. >> Okay. Okay. So now what I go once again I go back to the indicators and then they add RSI relative strength index. See whatever I'm using whatever I'm teaching over here is a simple simple indicators what the retail traders know very well >> but using it is in a quite different way. >> Okay. >> Okay. So now whenever RSI is above 70 what people used to call it? >> Overbought. >> Overbought. So market will reverse from there or it tends to continue. >> Yeah. Above 70 but overbought. So market will make a top >> uh and most probably selling should start from that level and yeah market will make a top and give a correction >> like whatever the money I have made till date [clears throat] everything came whenever the RSA is above 70 I bought the call options >> the market the call options >> yeah which is an opt >> okay >> so which is totally against whatever the textbook says okay so that's how the entire system looks like so like I'll just explain as the early example the person who has a higher momentum >> he has a higher probability to win and similarly the person who has the script which has a higher momentum right so on the on the running side then we need to go along with it right >> correct >> so that's what I have just used it over here as well so whenever the RSI is above 70 okay so you can just see over here it's RSA about 70 and here it is above 70 and I will I will just tell one more thing to all the retail traders who are watching okay so like you just take your P&L and then see your maximum loss. Okay, and that maximum loss would have followed two setups. The one is the super trend and the other one is the RSI. Okay, but on the opposite side if if the market says that it's an uptrend and you would have been bought a put option and the RSI would have been above 70. So these two conditions that's where majority of the retail traders would lose money because if the RSA is above 70 right the like let me just take this condition itself you would have just like that okay so market uh this is a high the people think that okay market will reverse from this point >> so they would have bought a put option and it's expiry day so market goes here still it comes up a cheaper price they buy a put option market goes here still they buy a put option claiming that the market will come down >> but they would and lost their entire capital on the expiry. So this is how most of the retail traders lose their money against the system against the momentum. That's what makes it very very bad for the option buying. So now we we take our trades whenever the candles are above the whenever the RSA is above the 70 level. So this is the [clears throat] third thing and now the third important thing. Okay. See like we are someone like who finds out the high very superbly. Okay. But what's the thing is we'll be not on the put side but we'll be on the call side. That's a bigger difficulty like what [snorts] we literally face. >> Correct. >> So in order to address that point like we used to have the R1 uh levels which is the pivot point. Okay. >> So now let me just add a pivot [clears throat] point over here. See why pivot point? See like these are the psychological values. Okay. Which has been derived from the previous day. >> Correct. >> Okay. So uh now we are just using the older data. Now the third mistake is the finding out the high. Okay. So like we are very good in finding the highs but on the opposite side like we like we'll find the high and that's where like we bought the call option not the put option. [snorts] Okay. So that's comes only because like we say like there will be some sort of resistance levels but we not notice it. >> Okay. So the market structures we need to understand properly. So for that like we use the pivot points. >> Okay. and on the pivot points right uh like these those are the psychological values and which has been derived from the previous day >> correct >> okay so I always take trades whenever it's above the level of R1 and what's the logic behind it is see at least one level of resistance should have been broken in order to travel in one direction >> okay >> okay so it's like the toll gate like if we if we pass one first to gate then only we'll be able to move to the next to gate right >> correct >> so similarly like I believe that there should be at least one level of resistance should have broken. >> So we use the pivot point over here and we take all our trades above the level of R1. >> Okay. The R1 is here. The above the level of R1 we used to take the trades. >> Correct? >> Okay. So uh next comes the fourth the very important point. Okay, which is the entry candles. Okay, see there are like hundreds of candles on this chart. Okay. How do you define which candle is your entry? Okay. You want to take a entry on a normal candle or a super candle? >> Obviously, what would be your answer? >> Yeah. My first question is what is super candle? >> Okay. See, like the super candle is the strength a candle which has a very good strength. >> Okay. >> Okay. See like uh let me just connect it with a real life example. >> Okay. >> There is a 3 ft wall. >> Okay. And there are 100 peoples over there. >> Okay. They need to cross the 3 ft wall. Do you think how many of people would have crossed the 3 ft wall out of 100? almost everyone 3 ft >> like see uh so based upon the standard deviation if you take it right >> uh one standard deviation we keep it as 3 ft more okay >> okay >> so uh it will be like near about like 68% of the people would have crossed it because like we have old people we have younger people like the many people will be there so like we just take an average of 68% of the people would have not crossed it only 32 people would have crossed it >> okay >> then what about 6 ft wall okay if you have 100 peoples who are like 5 ft. Okay. Like is it possible for everyone to cross a 6 ft wall? >> Not really. >> Not really. >> Not really. >> Okay. So obviously like we will have like five people's maximum would have crossed it. Okay. >> Correct. >> And if it is like a 9 ft wall, >> very few >> very few >> possibly nobody but maybe one or two >> maybe one one maximum. Okay. So like similarly we will consider the candles in such a way. Okay. So we will try to add bullinger band. Okay. So now I just tag bullinger band and now uh it's a two standard deviation. See we know that one we studied in schools right the one standard deviation two standard deviations >> but even colleges like I hope so like we studied in college >> you >> we use that uh bell curve to define the standard deviations. >> Exactly. Exactly. So I just put it as one standard deviation and you can see over here uh let me just remove the other candle other things. Okay. So now we can see here most of the candles over here okay are outside the upper bowlinger band. Okay. So only 32%age of the candles on the entire chart like we can see most of them are outside the outside the upper bowlinger band. >> Okay. On the other hand, if I just move it to two standard deviation, which is 95%age of the time, the candles will be within the range. That's what the two standard deviations says. >> Okay. >> Okay. So now I just change it to two percentage. And now we can see only few candles. >> That's a standard uh by default B. >> Yeah, exactly. That's the default one. Only two candles over here and few candles over here and a few over here on the bottom as well. And here. So now this is our entry candles. >> Okay. >> Okay. So these candles you can just notice it. These are powerful candles. These are not like ordinary candles. Okay. And if if someone who comes into the system and then see and then if you want to take the trade he can't take the trade because this condition will not meet on all the candles. >> Okay. >> Only 5% of the candles will match this particular entry type. >> Okay. So now we have the fourth condition which is the proper entry system. >> So Ballinger band helps us to choose the super candles. >> Yeah. Yeah. So that's our entry candles. Basically the gate to create the entry candles. >> Okay. >> Okay. So now this gives a very clear picture the four conditions. >> Okay. The first one is the super trend which which let me identify the trend. >> Mhm. >> And comes the next will be the RSI like which identifies the momentum. Okay. >> Okay. And the third one will be the pivot point. At least one level of resistance should have been broken. >> Correct. >> And the fourth one is the like the candle strength like a very good strength candle. >> Okay. >> Okay. So four conditions satisfied. Then we will take our entry. >> Okay. And this is not only the entry condition for a strategy. This is a base for a long trade setup. Okay. >> Okay. >> So whenever we are just going to take a trade setup, right? So long trade setup. You have any strategies to all the retail traders who are watching right you have any strategies whatever you have the conditions maybe price actions or anything but if these conditions satisfies okay see we are not predicting the market here >> the market proves itself that I have the trend I have the strength and I have the momentum okay and I'm not an ordinary candle the market proves itself now you you lay whatever the strategy you want on top of Okay. >> Okay. So then you have the higher probability. So with this like four indicators like we were able to address the four problems like the proper trend finding momentum and then the market structure and then the proper entry candles. >> Correct. And I I what I can see over here is every indicator uh is complementing each other. Right. One is for trend, one is for momentum, one is for as you said uh to find the super candle which has high volatility. Uh so every indicator is complementing each other not overlapping each other. That's what I can see in this uh setup. [snorts] [clears throat] That's what I can see in in this particular setup. Now there is one more problem that you said that is the stop-loss right and uh what I want to know from this setup is key if let's say I'm entering on the breakout of this ballinger band when my RSI is above 70 uh when super trend is green when the price is above the R1 >> right and I am entering on the breakout of the super trend >> okay >> where should I exit and where should I put my stop loss Superb. So now the exit part the very important part which everyone need to follow the fifth problem. >> Yeah the fifth problem correct very tight problem. >> Okay so now let me just fix it with a very simple fix which is the super trend. >> Okay. >> Okay. See we pretend that the market is an uptrend. >> Then when we will exit >> when the trend is over. >> Yeah. when the trend shift like the the super trend just like the switch it from green to red we're just going to exit the trade setup >> okay >> so it's going to be like very simple we have taken the for uptrend >> when the when the super trend changes to downtrend we'll exit it >> okay >> okay so it's not just like that ending over there >> just a super trend no it's not just a super trend and I've been a full-time trader only because of the super trend indicator because of the proper exit it gives see the Super trend will not just like that act as a as a exit. Okay? It will act as a move to cost. It will act as a trailing stop-loss. Okay? I will just give you a very good example over here. Okay? See in the first candle of the day, we can see on this green candle, the first candle. >> Mhm. >> Okay. So, we see that the candle is above the super trend. Yes. Whether the candle uh the RSI is above 70. Yes. >> Yes. >> Whether it's above the level of R1. Yes, >> it's above the level of upper bowling band. >> Yes. >> Yes. The enter condition satisfied. >> Mhm. >> From the entry all the way the market came down. >> Correct. >> And then exited over here. >> Correct. >> Okay. So this now acted as a direct exit point. Mhm. >> On the other hand, if the market in the second case we see here, >> above the super trend. >> Yes. >> Above the RS above 70. >> Yes. >> Above the level of R1. >> Correct. >> Above the level of upper bowlinger band. >> Yes. >> Yes. So we have our entry over here >> and the super trend right now gives this as the stop loss. As the market moves in our direction, >> it just trial the stop loss over here. >> Correct? And the entire day, the entire trend we were able to capture it. >> Correct. >> And the very very very hardest part for the retail trader is they take a entry at somewhere like 400 premium. >> They will exit at 420 440 maximum. >> Correct? >> They don't try it to the entire thing. And while we see our P&L right I will show what's the one thing as a profitable option buyer do as a what the people who are missing okay we'll definitely understand from that how the super trend helps to capture the entire trend >> and there are days [clears throat] where the retail traders face issue they would have taken the entry at 400 they would exit at 440 but it would have ended somewhere like 1,000 premium >> and they would have lit literally cried for the entire night. >> Okay. See like that would be fixed with the super trend, [clears throat] >> right? >> Okay. And and see like whenever the trend changes, we are just going to exit it. Whenever the trend continues, we are going to capture the entire trend of the participle system. >> Okay. And initial stop loss is also the super trend. >> Yeah. Yeah. Initial stop loss is also super trend. So the first example, the morning entry was a direct stop-loss. Not even it has crossed the the the entry candles high >> directly. It came to the exit. On the other hand, one another trade taken here and rallied the entire day. >> Correct? >> So this is how the system is >> called. This looks pretty interesting uh at least on paper right now. Uh but one question that I have is what is the ideal time frame for the execution of the strategy? Like >> yeah see like uh right now we have seen this on five minute time frame. >> Yes. >> And uh this is a totally an intraday trade setup. >> Yes. Okay. And we can just use it in 3 minutes as well as in 5 minutes. Okay. It's not something like only it works on 5 minutes. And I say like you can create this system in positional as well. So by using 15 minutes, 30 minutes, one hour. Okay. >> And this system pretty works good in all the system like all the time frames. >> Okay. And whatever I thought in today's session like till now with the five-step frameworks what I've seen right see this will be common for all the stocks index commodities and even any scripts like you want to trade this system will act as the base for your long trade setups h noted uh so one problem that I faced with majority of the trend following system this looks like a trend following plus momentum setup u One problem I faced with them is whenever the market is sideways, they give a lot of false traits. >> How is this system catering or how is the system solving that problem? >> See like uh in order to understand it much deeper like if we start to back test this >> then I hope like you can understand it in a very proper mode. >> So let's practice this for sure. >> So like so now I let me just back test this condition and then we see like how it literally act. So now this is how the super trend uh would have performed. So it just takes some time. >> Just simple super trend. >> Yeah, it's just a simple super trend. So 1 lakh 57,000 rupees of profitability. But post slipage this will become negative. That's totally fine. But 6,000 trades has t taken in the long. So which is near about like every year it has taken 800 trades above. >> Correct. >> Okay. So now we told the fake entries, right? Mhm. So why we have this RSI? I'll just copy and edit. And then I just put here RSI the second indicator. And then I say edit it. And uh I say RSI is above 70. >> Okay. And then I save it and then I submit it. Okay. See the RSA above 70 market need to reverse. >> Correct. >> But that's totally wrong. I don't say it's totally wrong but with my system that's how the thing works on a trendy day. >> Okay. >> Okay. See we want to capture the trending days. Okay. See the profitability has been from 1 lakh 4057 to 265,000. And the curves also become like smoother. >> It's becoming quite good. >> Yes. >> And now with just,800 entries literally 4,000 entries has been the fake entries has been removed >> from the system. >> See this one indicator adds more more more value. >> Right? >> Okay. Now I just copy it. And then what I do I will go with the third one which is the candle close is above the level of R1. Okay. And then I save it and then I just take it to the submit. Okay. So now this takes some time but you can just see very clearly from 6,000 entries 2,800 entries. >> Correct. So this is a very a very good number of trades have been reduced and the profitable trades has been there because that's why the the profitability has increased from 1 lakh 57 to 2 lakh 50 something >> correct >> and now it went to 3 lakh 41 >> and the equity curve is getting pretty better. >> Yes, >> definitely. >> So now we can see >> the trades is just,00 trades. Literally 5,000 trades have been managed system. Correct. >> Okay. And the third important thing which is the upper bowlinger band and let me just give it as current candle close is above the upper bowlinger band. So this is this helps us to get entries only on the stronger candles. >> Correct? >> And that is submitted. So now we are literally the indicators are complementing each other as you said okay see it's not something like one with one indicator you can't do anything >> correct you need to combine with multiple indicators in order to attain this sort of results >> okay see this is laying the base for you this is laying the base for you the profitability has slightly came down but that's totally fine with just 974 entries >> we were able able to make this happen. >> Correct. >> Okay. And for the retail traders who are trading in the market and that two on if you're taking a long call >> Mhm. >> there is a secret for you. >> Okay. below the level of R1. I just save this the same setup if I'm taking below the level of R1. Just imagine how the results will change like what's your guess? >> It should reduce, right? That's that was your uh threshold that we should only trade above the R1 levels, right? >> Exactly. See, everyone takes that long [clears throat] call whenever they want. Whenever they want. >> Yes. >> But that's not the right method of doing it. Okay, this is how it's below the level of R1. >> If next time those are watching you want to take your long calls, okay, please take only above the level of R1. Okay, and this is the reason behind it. >> Very interesting. Very interesting. >> See like what we are literally trying to achieve over here is we want the retail traders to understand where not to trade. >> Correct. >> And in what situation you need to take your long trade. This is not a strategy. This is a system where the market says I have the trend, I have the momentum, I have the capacity to move to the next level >> and I have the proper entry conditions. >> Correct? >> So where the market proves itself >> correct >> that I have the trend, I have the momentum, I have the capacity to move to the next level >> and I take trades only on the special candles. >> Correct? Okay. So this is a system where market proves itself. >> It is not a strategy. You want to put your own strategy on top of this. Yes. This system will increase further. >> So this is what like I I personally want the reality to understand this is their playground. >> Correct. >> Okay. >> And this is like the return that we're generating with one lot, right? >> Yeah. This is this is totally on one lot. >> So one lot means around >> Yeah. See like of capital. [snorts] >> Yeah. like one lot if you are putting it on ATM >> and maybe like on the on the money value we spoke I will add one more valuable thing okay which is which I don't share much outside >> I don't trade with ATM >> okay >> I have a special uh strike selection mechanism >> yeah that was uh actually my next question key how do you select the right strike price for this particular trading >> see uh like everyone used to select ATM OTM ITM >> but I have done like overall lack of back test in the last five years. >> Okay. >> Okay. And I found out that the system works pretty good whenever we are trading with a premium of 250. >> Okay. >> Maybe you can ask me like how you'd come up with the >> Okay. So, >> okay. >> But why 250 so specifically? >> See like uh if it is uh it's not something like number it's just a 1 percentage of the underlying. >> Okay. Say Nifty is trading at 25,000, right? So I just take it as 250 premium. >> Okay. >> So that's the logic behind it. So there is nothing like uh uh we can say like uh only 250 will work. It's all about like 1%age of the underlying. >> So NFT is at 22,000 we're taking 220 uh >> premium value as strike price. >> Yes. >> Correct. Correct. So this literally generates a good alpha than the the ATM methods because ATM sometimes will have uh uh like higher premium like uh some higher premium and near to expir it will have only less premium. >> Correct. >> Okay. Then it's it's not that great. So now you can see the equity curves are getting much much more smoother. >> Okay. >> Interesting. And if someone don't want to take a long trades on this setups, they can just like that duplicate the same setup. They can create ratio spreads or they can just like that go and just like that sell the 250 rupees premium and then they can just do it. Okay. See this gives the retail traders the fre the freedom to do anything with this system. >> H got it sir. And this looks pretty interesting. I was not expecting such results uh purely from a indicator based setup and of course when you show when when when you were showing that R1A logic the results were just magical but just in case I want to buy the puts how should I go ahead with that see whenever it comes to the put option right okay we all know that this there is one logic the market whenever it climbs right it used to climb like a staircase step by step step by step >> correct >> but whenever it's falling right it will taking the lift directly one slash like this. Okay. See in order to understand more about the put side entries and more advanced concepts of the long trade entries I have curated a course in uparch. In this course I have explained more in detailed about the long trade setups as well as how to configure the strategy for the capturing the downside as well. And the very important thing the retailers have a mindset that if they have a good strategy they can make money >> but that's where the bigger problem comes into the picture. >> Okay I'll tell a simple strategy the candle is above the super trend you take the entry okay >> and candle is below the super trend you just exit the trade setup. >> Okay so will you be able to do it for one day on a 5m minute time frame? >> Yes pretty easy right? pretty easy. >> Yeah. >> But for one week, is it possible for you to do it every 5 minute? You need to look into the day. >> Um probably yes. If I like sit on the >> for one month, >> um little tricky but tricky. >> Yeah. >> For one year continuously all candles in and out on a five minute time frame. >> Not really practical. >> See practically we we may just think that okay 1 year 1 month is fine but a single day has 75 candles on a five time frame. >> Correct. And in a week it is 375 and in a month it is,575 and in a year it is 18,750 candles are there. So literally a retail trader can never follow a system which is a very basic super trend setup. >> Okay. And in the course I have explained how to automate this system as well. >> Okay. >> So even one strategy can be configured right. But while you learn all the all how to automate this, you can create multiple strategies and you can run all the strategies on together and the entire thing will be covered in the post. >> H no sir and if you guys also want to learn these powerful strategies from sir himself where he has explained everything step by step in detail how to execute the strategy where to enter where to exit and they are going to be just as simple as these strategies pure rulebased pure indicator based and of course very very powerful. You can definitely click on the link in the description and check out the detailed course by sir. Uh sir coming back to my next question. So sir uh one thing I've realized is if the position sizing is not right doesn't matter how great the strategy is you can still end up wiping out the entire capital right. Uh I have personally seen those traders or I have personally met those traders who have faced similar kind of a situation. um you tell me how you properly fix this position size problem and before that I really want to see how your strategies has performed in your P&L. >> Okay. See uh I hope so like the position sizing question would have been addressed in the P&L itself. >> Okay. >> Okay. So uh let me just start from the financial year 2024 2025. >> Okay. >> Okay. So it I started with a capital of 10 lakh rupees and uh till date I just used to uh put the payout from this system then it generates money. >> So it's it literally made 17 lakhs of profits over there. >> Okay. >> In the year 2024 2025 and in 2025 2026 it was near about like 21 lakhs and uh in 2025 20 uh 2026 2027 it's right now with 2 lak 36,000. >> Okay. And one thing what I want all the retail traders to understand. Okay, this is for everyone who are watching it. This is the very very important thing. You can just see over here a 15 lakh rupees of net profit over here. >> Correct. But the one trade has contributed for 4 lakh 41,000 rupees >> and other one is 3 lak 89 and 2 lakh 48,000 rupees of net profitability. So the see the majority the five trades has contributed to the majority of the profit. >> Correct? >> And you just see the other important thing is the profit and loss and it's just the the number of days. I don't have a winning probability of 80% 90%. I have only 40 to 45 percentage of winning probability. >> Okay. And now I'll just see like we just go to the next year as well. This is not one year. Here this year it made a 21 lakh rupees of profit. And over here you can just see uh similarly like four lakh 2 lakh 2 lakh two lakh. Okay. Okay. And similarly here also only 40 to 45 percentage of the days I make profit which is on percentage of days. >> What capital are we using? >> Like on the entire entire thing it's only 10 lakh rupees entire thing. So it's not like 2024 I used higher capital. Same capital deployed on all the years. >> So at the end of the year you take out the profit. >> Yeah. No it's not whenever I used to maintain it as a 10 lakh rupees of portfolio. >> Okay. >> Always because like this is a basket of 10 lakh rupees. So I run it for only for 10 lakh rupees. >> So you do option buying with 10 lakh rupees that's that's a fixed thing for you. >> That's a fixed thing. >> Okay. And how do you maintain the position size? Like why this 10 lakh rupees number? >> Uh see like uh very honest reply. Uh there was one question which has asked me during a YouTube live. >> Mhm. on the year 2022 >> a person asked me like uh will you will you be able to showcase that retail trader can make money in option B >> and on that day I told him I will keep 10 lakh rupees and I will show you that yes it's possible for a retail trader to make money okay and that's the only reason like I just did it and so like till till date I say one thing option buying or option selling okay market is ready to reward you >> correct? >> But you should be in position to accept it. >> Okay. And see like the what why they are making the loss I will tell you. >> Okay. >> Here you see the profits right? Four lakh rupees. We don't see the profit. Let the profit be we forget about it. But the losses what I made. The maximum loss of what I made is 75,000. The maximum profit I made is 4 lakh rupees. >> Correct. >> Then this makes it different. M >> this is the only reason the profitable traders are different >> and if you see a person who's losing money it will be the opposite the maximum loss will be four lakh rupees and the maximum profit will be 75,000 true >> and this is what we need to understand and we need to accept it see this is not about the showing the P&L and people have the myth of 80% 90% winning probability no as to be a profitable trader you need 40 to 45%age which with good riskreward is far far far enough. >> Okay. >> Right. >> So hereafter don't people people don't look behind the winning probability. Winning probability is just a number. >> Correct. >> Okay. The risk appetite is the most most important thing. >> No sir. And and uh we just saw the P&L for this year. It was around two lakh. Last year it was 20 lakhs. >> Yes. >> To like this year five months are already over. uh why the profit is not that great? >> See like uh as a as a as a trend following trader right it requires only one day >> that one day we required to make money >> correct >> and uh to be very honest like uh it was not on this aspect like if you just look into the year- wise data >> Mhm. from January 1 uh till today. I can sh I can show today. >> Yeah. Yeah. Okay. >> Uh till today then it's going to be near about like 7 lakh 46,000. >> M >> so it's near about like 74%age. >> Correct. >> Okay. So hardly like uh see like it's like last year was pretty good right >> so uh on that aspect like this is totally okay. >> H this is pretty [clears throat] interesting sir. And now coming back to my previous question key [snorts] uh let's imagine key I have a capital of one lakh as an option buyer uh how many lots should I buy with that capital >> okay see like uh if you ask me like with with one strategy >> okay uh see like already we discussed right so to I select 250 premium >> okay on nifty it literally requires below 20,000 rupees >> correct >> okay which is for the premium amount >> yes >> and the remaining uh I will take the draw down as well as into this account. >> Okay. >> Okay. If my draw down is 30,000. >> Mhm. >> Then I will sell for 50,000 rupees, I will put only one particular strategy. >> But the same 50,000 rupees can be reused for the put option. >> Okay. >> Because when the call option triggers definitely the put option will not take the trade center. >> Right. >> Okay. So that is totally uncorrelated system. >> So with 50,000 rupees you can put two lots right now. >> Right. And if you're using some uncorrelated long call strategies as well say like I already defined right if yesterday is a red day or the it's a close is red and if yesterday is a green day then obviously that strategy will also not trigger on today. If it is green day okay if the strategy is not uh configured for green day then it's not going to trigger over here. Correct. >> So we will for one lakh rupees we will be having like five strategies >> which will be accumulated with each other. Okay. and it will be uh like five five strategies mean the draw down will come down and we can deploy it on a very proper node. So it it we can't come up with a conclusion that this is the defined mechanism. It depends upon the strategy what we use for one strategy it's very clear 50,000 rupees one strategy is totally fine but for one lakh we need to create a portfolio. >> So that is what like we have just explained on the course things as well. Okay. But for example, if let's say I'm just using this particular strategy to trade and if I have one lakh rupees. So according to the 50,000 rupee rule, I can go ahead with uh two lots to trade >> uh like one lot to trade >> for one lakh rupees. >> For for one lakh it will be two lots. >> Two lots, right? No, sir. And all these uh rules and of course the way you proved it using this uh graph and the statistics, it's very very interesting. Um I would like to note this one thing that you know everybody starts their trading journey in a similar way. First they'll maybe they are attracted by the money of the market then they start uh maybe they start with you know some recommendations or tips maybe on TV or WhatsApp or uh telegram and then they start learning and then you know eventually they find a system. I want to know about your journey uh of identifying your trading style. Okay, I'm going to trade with these indicators only. I'm going to trade with uh these perfect rulebased setups only. >> Okay, see my entry into the stock market was totally a different story. >> Okay. >> Okay. Because people uh would have seen based upon money they would have come inside for side as they would have come inside. But my story was accidental. >> Okay. I just put one sign on a wrong sheet and I become a trader. >> What? >> Yeah. See like what happened is I um I went to open a bank account. >> Okay. >> Okay. That bank guy know he had a target. I hope so. >> He gave me the demat account first. I literally signed everything and then I gave it to him. Then he gave me the next sheet to sign. I asked like what's that sheet is for and what is this sheet? He told that's a demat account and this is a bank account >> three in one account that they give. >> Yeah. No but it was like he he defined it very clearly. He want to get myself get into the demat. >> Okay. I need to enter into trading. I have not defined. He has defined that I need to enter into this trading. >> Correct. >> And now I never thought on the day one while I put the sign I would become a trader. >> But it was totally an accidental thing. And uh how I came into uh algo trading or the system whatever I I just speak right now. See um I've been a uh a price action trader >> for a very long time. I used to follow supply and demand and I used to teach to people as well like I explained them uh but no one was able to replicate it >> right >> because it was like more defined uh for me I say this is entry the other person will say no no no this this is not my entry and they would have missed the entry if they know the entry also they miss the entry >> correct >> that has become a very big problem and then once I started entering into algo space >> then I was able to understand that uh if if I configure strategy and I teach to someone he can directly he can just come up and he can deploy it. >> Correct. >> Okay. And what happens is like a person who has the experience of five months say like three months also if they if they enter into an algo trade setup okay if someone who has experience of say like nine nine plus years of experience >> okay the the the learning curve literally becomes very easy for them they don't need 9 years to learn >> correct >> okay all they need is to have a basic analytical skill >> and they will be pushed to to enhance their uh uh knowledge with just in next two years they can have the knowledge of people who have like 9 years of experience. >> Correct. >> Okay. So that's how like uh I literally uh entered uh into this trading space like from a from an accidental trader and into price action system and from price action all the way into algo trading. >> Have you gifted that guy something or not? >> No, I don't know like who's that guy [laughter] right now. >> What is the capital you started with actually? See like I started somewhere like uh the first trade I took it on SBIN >> uh I had like uh like 1,000 rupees in my account that's that's where I started. >> So in 2017 we used to get around 40x 50x of leverage >> uh in equity trading for intraday specifically right did you use that? >> Uh there like once this leverage comes into picture I have another story on it. >> Okay. >> Okay. See like uh uh I don't much uh I started with equity like as you say like everyone will start with equity and then they will switch to uh uh this off. Yes. >> Okay. So like what happened is >> I was trading in a broker and there was there will be RM right so that guy called me and he told sir there is one guy who has literally doubled his capital. >> Mhm. >> Okay. So I will put the same strategy for you. >> Okay. So you just put the money and then you start with it. >> Yeah. >> Then uh Okay. Then I said okay we'll start with that. Then he told then he told to sell uh one call option put put option I don't know what is option at all >> right >> okay and uh I I sold it and the first day it made near about 5% profit I was shocked oh my god what is this then I start digging into it then only I understood option has an expiry >> correct >> and that Thursday is a bank nifty expiry >> okay so during that time we have pretty good exposure like as you said okay so like with options bank nifty I can sell with just 5,000 rupees. >> Yeah. >> Okay. So I literally sold uh and on the day night I literally never slept. I want to understand what is behind that. >> Then I understood it's known as short strangle. >> Correct. >> Okay. So that's how my option journey has started and uh it was like phenomenal like every moment right like like my my entire journey will be like very funny. Okay. No in nowhere I have defined what I need to do. >> Yeah. It was all accidental. It was all accident. [snorts] Someone would have defined like what I need to do. >> Correct. Pretty interesting, sir. And I think not many people will be able to relate with this. But uh for sure an inspiring journey and that's all for today. That's what I wanted to know from you. One of your super powerful strategies along with the logics that you've defined. It just gives this I I'll be very honest with you. The R1 rule that you showed us, it was truly magical. That was I think the best part of this podcast and that was like truly game-changing for for at least for this particular strategy. So thank you so much for this and you guys tell us how did you like this podcast and if you guys learned something valuable let us know in the comment section below. If you have any questions regarding this strategy or anything regarding market or about sir uh that too write us in the comments and for sure we'll try to answer that. sir will help us to answer all the obviously >> and of course if you want to learn all these super powerful strategies from sir himself make sure you check out the course the link is in the description we will see you in more such informative content on this channel till then keep learning and keep trading and of course don't forget to like this video share this video with all your trader friends see you in the next one thank you so much for being >> thank you thank you thank you so