A Profitable Sensex Strategy with just 10 orders per week

[Music] Hey everyone, welcome to another video on my channel and today in this video we are going to talk about a simple positional option strategy which comes with just 10 orders per week. So you might be one of those traders uh who might be tired of punching a lot of orders intraday and you feel that you're not going anywhere. So in this video I'm going to share a simple framework. Again note that this is not any kind of recommendation. It is important to know what kind of risk comes with the strategy framework. Understand it consult your adviser and only then start trading. So before you actually trade in the real account, you can also try paper trading it. See how the results are and then continue if it is working well. So in this video I'm going to share the entire strategy framework. So this is a positional Sensex trade which comes with hardly around 10 orders per week. So let's quickly get on to building the strategy. So again, so we are going to back test this and also see how we can automate this entire strategy. Please be aware about the risk that is involved in this particular strategy. So before we move on, so I would also like to tell you about quickly learning path. So in case if you are one of those traders uh so who wants to trade systematically who wants to build systematic uh methods of trading so then this is a right workshop for you. So this is going to be a two-day workshop which is going to be a very personalized one. So we are going to understand you as a trader and help you build equity and option systems that can suit your need. So the July batch is completely booked. So we have few registrations for August and September which you can check it out. So as you scroll down there are also other testimonials which you can definitely look into. So now let's quickly move on to the video. So in this video I will be uh first sharing the framework and later showing you how to automate the entire thing. So the first thing uh what we see uh when it comes to the current market is we are seeing a lot of spikes coming on intraday. So especially when you're trading expiry the spikes are going to hurt you a lot and it is going to make it very difficult for you to trade profitably consistently. So let's try to build a simple positional system in Sensex. So we are going to start with Sensex weekly expiry options right. So these would be Sensex weekly expiry. So we are going to start entering these options on 4d. So what do I mean by 4 DT? That means there is 4 days to expiry. So usually uh Sensex is expiring on Tuesday that means we have to execute it on Wednesday. So Wednesday morning we are going to take this particular strategy. So again on Wednesday what should we exactly enter? So this is going to be the next question. So on Wednesday let's try to stay little farm let's not try to stay very close to the market and let's enter something like 1,000 points away calls and puts right. So 1,000 points away C and 1,000 points away P. So this should be 1,000 points away from the market. If market is trading at 80,000 then we are going to short a 81,000 call option and on the downside we are going to short 79,000 put option. So what we are essentially doing here is going 1,000 points away from the spot on Wednesday morning and we are shorting a call option as well as a put option. So you can pick any time in the morning. You can pick 10:00, you can pick 9:00. It is up to you. So when you are building a system, it shouldn't be very time dependent. So whatever system you're more comfortable in or whatever time you're more comfortable in, you can definitely pick that. So when so when you're trying to build a system and when so whenever you're trying to build a system and if it becomes too time dependent so something is working at 920, something stops working at 9:25. So that is uh not a great system to be honest. So here in this example uh let's enter around 10:20. So there is nothing specific about this time. You can enter at other times as well. So when you're building the system just use it as a framework. You don't have to use the exact parameters. So I also want you to understand the risk associated with each one of it. So after this we know that the markets are slightly volatile. So markets keep swinging up and down. So what we are going to do is we want to keep a tight a stop-loss as possible as tight as possible. It is okay to enter them again and again. So we can re-enter the trades multiple times but we want to ensure that we don't keep a very broad stop-loss. So we'll go with some tighter stop-loss. So for this I'll be going with a simple 30% stop-loss. Again you can change the parameters. There is no hard and fast rule that you have to use this parameters. So you can go with a 25%, you can go with a 35% or a 40% stop- loss. So let us assume I have shorted this 81,000 C at 200 rupees and 80 or 79,000 PE at 200 rupees. So how we are going to place the stop loss is essentially so 200 plus 30% which is going to be 260 rupees. So the stop loss on the call side is 260 rupees. The stop loss on the put side is also 260 rupees. So I'm going to place a 30% stop loss above my cost price. So now three simple parameters are done. When to enter? So we are going to enter Sensex 4 DT options in the morning maybe somewhere around 9 or 10. So we are going to go 1,000 points away shorter call option 1,000 points away and shorter put option and place a 30% stop loss. Now we are going to have a small uh adjustment I would say or a small modification to continue our trade once the stop loss hits. So how are we going to continue? What are we going to do? So let me show you how it works. So since we have kept a very tight stop-loss, it is okay to re-enter the trade again and again because even if you get hit, you'll be hardly getting hit by a very small margin. So for this we are going to use something called as reentry. So what is re-entry? Re-entry is basically whenever a particular leg is hitting your stop loss and it is coming back to your cost price. So in this case let us assume you have entered at 200 your stop loss is at 260. So the option surges up hits at 260 and again comes back to 200. So it goes from 200 to 260 and again comes back to 200. So whenever it is hitting your stop loss and coming back to its cost price, so you're going to re-enter the option and again place a new stop loss at 260. So let me again break it down in case if you're a first- timer trying to understand re-entry. So you have entered at a particular price, it hits your stop loss and again comes down back to the same price. You're going to enter it again and keep the same stop-loss. So what essentially you're doing? So whenever the option is moving from 200 to 260 it is going against your direction. So as in when it starts to go against your direction you want to exit the position. So after exiting the position this can go to 300 400 or whatever the level but whenever it comes back to 200 from 260 whenever it is coming back to 200 so you want to re-enter because now the direction of the option price is heading down. So whenever it is moving in your favor you want to re-enter. So this re-entry we are going to do it a total of two times. So what do I mean by two times? So once it hits your stop loss comes down to 200 you enter again it hits your stop loss comes down to 200 again you enter. So this process we are going to repeat two times. Why are we doing it two times? Because our stop loss is hardly 30% and even if we are getting hit two times we are going to lose a total of 60%. So because our stop loss is very small initially itself. So this is a very simple strategy as you can see that uh this entire strategy comes with hardly around 10 to 12 orders entire week. So that is going to be the maximum number of orders. Many of the times you might finish with just around four to six orders in the entire trade. So sometimes it will come to around 10 orders for the entire week. So this first before we see the returns it is very important to understand the risk right. So what I will do is I will show you how to build and back test the strategy from fintagget. So fint target is a free-touse automation platform that is built by our team. So once you go to fintagarget.in you can sign up for free and once you have finished signing up you can log into the fint target. So here in fint target you can straight out come to the strategy section and create your new strategy. So what we are going to do essentially here is we are going to name our strategy as sensex positional. So you can name it anything you want. So after this we are going to choose the index as sensex. So in case if you don't want to build this yourself I'm just going to share the link for the same in the description below. You can click on the link and the entire strategy is going to get built for you on your fintet account. So here I'm going to change intraday to positional. So I'm going to keep the start time as say 10:22. So I'll go to 10. We can go at 10:20 which is totally fine. And our end time can be at 1520. So I'm going to keep it days before expiry. So we are going to enter 4 days before expiry. And we are going to exit on zero day of the expiry. So enter on Wednesday, exit on Tuesday. So what we are going to do is essentially start by selling 1,000 points away call 1,000 points away put. So a call cell of 1,000 points away. Then again I'm going to change it to put cell of 1,000 points away. So here let's make it 1,000 points away. Put cell. So along with this I'm also going to set stop losses. So I'm going to place a stop loss of 30% as we have discussed. And finally I'm going to add re-entry. So we want to re-enter the trade only when our stop loss gets hit. So let me select the re-entry stop-loss on both the legs and I will change this recost to reentry. So here I'm going to change the parameters to two. So we have already discussed why we are going to enter two times and with that my simple strategy is now created. So a very simple plain strategy. We haven't complicated a lot of things and let us see how it will work. So I will save this strategy. So once you have saved this strategy, Fin target also allows you to back test the strategy with stockmark. So in case if you don't have a stockmark account, you don't have to worry. So once you register on fint target and purchase any of the plans automatically you will receive a stockmark account and your back testing credits will also get credited into the same account. So you can directly purchase pint target plan and get back testing credits on stockmark. to back test I'm going to click on these three dots and click on back test and this strategy is going to get created and it is going to load right over here on stock. So you can see everything is created. So let us try to test this from the very beginning when Sensex options was started and let's see how it has worked out. So one very important thing to note here is this is again not a recommendation not a strategy just a framework. So you can change any of the parameters. Please try to understand the risk that is associated. So option trading is not a easy thing. It has to suit your psychology. It has to suit your overall risk-taking ability. So once we come down, so you can see that this simple strategy has actually done pretty good. So it has given us a total return of 88% with 4% maximum draw down. So you should also understand the draw down part of it. So I'm emphasizing on the risk part again and again because I don't want you to run this purely for profits right so this has a winning ratio of 3x4 which means every four weeks you run so three weeks can be profit historically it has been profitable so I am not giving you any kind of assured returns so historically so three out of the four times it has been profitable so on top of this you can see this comes with a fantastic expectancy of almost around 1.43. So this is actually a really good expectancy to be achieved and you can see the performance right over here. So yearon-year performance of this particular strategy has also been really good. So a very simple strategy on Sensex a simple stop-loss. So then alongside you can see the kind of results that we have achieved. So it comes with a maximum draw down of 38. So overall there was a 38 uh days drawd down for this particular strategy right. So this way you can build and test out multiple strategies on fint target. Open your fint target account today and you will be eligible for exclusive offers from first talk. So you can open a free account on first talk and not just that you will also receive 2,000 rupees worth free brokerage credits. So please don't miss it out. So make the best use of it. Start automating today. reduce your stress, reduce your screen time and enjoy the process of automation. So I hope how we built this simple very basic strategy and an effective one. Uh so you found this entire video useful and informative. So please do drop in the comments what you feel about this. So if you have liked this video, hit the like button and ensure you share this with all your friends and finally don't forget to subscribe, right? So click on the subscribe button, subscribe to the channel because I'll be coming out with more such videos. Thank you so much for joining guys and see you soon in the next video.