It as been near 2 years I have been investing in stock market, but always of delivery basis. I have been often told about Future and Option is for traders, and have been advised to stay away from it. But when you are advised to abstain from something, it attracts. I have been analyzing the charts of various scrips including NIFTY, but never had enough courage to act on my own analysis.
Finally, I entered in the future/option trading and this to record my first trade, first profit and first loss too. :)
A. In my first FnO trade I bought MINI NIFTY at 4565 on 4th June. My decision to buy NIFTY was based on RSI (Relative Strength Index) indicator. During the previous two days (2nd and 3rd June) NIFTY had cracked from 4869 to the low of 4565 and RSI indicator was just on 30 indicating oversold position. Therefore I assume that NIFTY would give some technical bounce back. I wanted just small pie of my share and was ready to sell NIFTY if earned 50 points or so. However, Uma advised my not put cap on my profits , but I was over cautious and as it was my first trade, I wanted to end it with some profit.
So, I sold NIFTY on next day at 4616 earning my first 50 points , but had I waited, I could earn more 80 points. But , then again patience is rare virtue. Nevertheless I was excited with my first trade and profit, and enjoyed enormously. By then everybody around me were painfully aware, that I have become “NIFTY Trader” 8)
B. Encouraged by first the success, I ventured again on 6th June. On that day the market was at its volatile best. In the afternoon I decided to go long, as CMF showed reduced distribution on the previous day (5th June) and I bought NIFTY at 4697. But the market, as if to teach me a lesson, started sliding down and with the ‘able‘ assistance of Reliance Money I eventually squared off the trade at 4644, losing all the gains of the previous trade with some additional loss.
Then , at the closing moments I decided to go short and I have short sold NIFTY at 4604 , considering that the NIFTY is in intermediate bear trend (CMF is also again in hight distribution mode) and it would be wise to go short instead of long which is more difficult in the present situation.
Now, with all the circumstances has happened during the week ends, NIFTY seem to be cracking nearly 100 points of not less. I am keeping my fingers crossed.