Trading options to me is the greatest personal endeavor a person can take on in their life. I say this because of how difficult it can be at times and how all-consuming it can be as well. It was one of the last professions that who you are and what you think of yourself is reflected back at you based on your equity curve.
Throughout this article I will walk you through various aspects of trading psychology and how a winning attitude can lead to greater profits. I can honestly say as I write this article that I am a profitable trader and will continue to be so for as long as God allows me. The one thing that has taken me from losing money in the market is realizing that whether I make money or not boils down to my attitude and blind belief in myself.
1. The Equity Curve analysis: Trading Options
Is your equity curve isn’t pointing towards the Northeast, you might be on the wrong direction!
What is Equity curve?
An equity curve is a graphical representation of the change in the value of a trading account over a time period. An equity curve with a consistently positive slope typically indicates that the trading strategies of the account are profitable, while a negative slope shows that they are generating a negative return.
How to build your own Equity curve:
Here you can see, my equity curve based on past trading performance in Bank Nifty Intraday options, from the month of Aug -17 to Feb -2018.
Here you can see, the green line indicates the growth of my trading capital month on month,
As you can see, the green curve is not straight heading upwards, but you can see, it is moving towards the north-East, month on month.
This indicates the positive return from the trading performance, on the right column can see the percentage values, which indicates the overall growth in trading capital month on month.
Currently my portfolio is nearing 100%, means my trading capital has almost doubled within 7 months of active trading in Bank Nifty intraday options!
2. The trading performance: Options Trading
In any businesses, time is the main driver for evaluating performance. Through monitoring the results based on trades, one can evaluate their own trading performance. Also analyzing the data to predict the future growth potential based on trading performance.
Well how long should you wait to evaluate your trading performance…yearly, monthly, daily?
The answer to this question is very simple. Here you are evaluating based on the number of trades you placed with the results achieved over a period of time, for getting better trading accuracy place at least 30+ trades, following a defined trading plan.
How to evaluate trading performance !
Well here is my trade details from Aug to Mar 18, where you can observe the following points:
- Winning trades in green bars
- Losing trades in red bars
- Also the percentage of win/loss for each trades!
Here is the summary of my trades where you can see that, I have did totally 54 trades from Aug to Feb 18, in which 34 trades were profitable trades 24 were losing trades.
Also my maximum winning trade was +15.20% on single trade, also my biggest losing trade was -10.36% on single trade.
Based on my trades, I have achieved win ratio of 62.96 %, means that I was profitable only for 62.96 times, with that I could able to achieve trading profits of close to 95.98% within 7 months of trading Bank Nifty intraday options!
By this analysis you will come to know that losses are part of trading plan, also it doesn’t matter if you lose multiple times unless you follow the right trading strategy!
3. The trading strategy:
Trading is a skill which needs to be developed by back testing your trading strategy, following the trading strategies which I follow for my consist profits:
- W-bottom formation
- Consolidation patterns formation
- F-patterns formation
Also to be a professional trader one need to adapt to their own trading system, which you will learn in E-course (technical Analysis).
Here you can see I have attached the following patterns formation with live case studies!
As in trading plan we have to define the following parameters before entering into a trade:
- The entry price based on trading strategy!
- Trading Lots/ capital engaged per trade, based on money management skills (learn money money management skills through Psychology E course)
- The exit price based on risk reward ratio (learn how to plan trades with defined risk: reward ratios from Psychology E course)
- Stop loss based on trading plan, (If the trade goes wrong accept loss don’t revenge trade, as it is the part of your trading success)
Following the right trading plan with good money management skills heps you to be profitable in intraday trading.
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Day trading “starter kit.”
In trade psychology we have introduced the following E-courses for intraday traders,
Technical Analysis : A practical approach to trade options Intraday profitably
Trading Psychology: Learn every thing as simple as possible!
In this E-courses you will learn in detail on how to trade Nifty & Bank Nifty intraday options profitably by following the consist intraday strategies, with defied money management rules,
To have a look at free preview of E-course click here: link
Also as a part of bonus to my subscribers we have given a flat 15% off on both the E-courses, to avail the bonus offer, type the coupon code: 2018
Winning at trading has little to do with your system, trading equipment or internet speed. It comes down to can you accept full responsibility for your trading results. Do you accept the fact that the market gives you what you are willing to receive. Do you believe in the concept of probabilities and that you do not have to be right on every trade?
Before I close this article out, I would like to thank my readers & subscriber community, Tradepsychology.com has just passed months, I am really surprised by the subscriber’s base which it is growing day by day!
I thank everyone for their kind support which motivates me to share valuable content to my readers to help you grow as professional trader!
If you liked my article please do comment your responses, Share it your friends & family that will encourage me to do more in the coming future.