My 2021 DeFi Predictions:

1\ the rise of Decentralized Derivatives
In 2020, the embryo of the DeFi derivative market started to take shape. A dozen DeFi derivative platforms were established and began to launch mainnets. I expect this market will explode in 2021.

THREAD ON DELTA (The most important GREEK)

Many traders don't indulge in understanding GREEKS because they think they are very complicated.

There are 4 primary greeks:

Delta
Gamma
Theta
Vega

In my experience, understanding DELTA is enough to take benefit of greeks.(1/n)

Delta measures the rate of change of options price based on the directional movement of the underlying.

So this means we can know in advance (theoretically) how much an option will move with the underlying & so we can prepare our strategies accordingly. (2/n)

Value of delta varies between 0 & 1 for calls and -1 & 0 for puts. This figure tells how much an option price will change, when the underlying moves 1 point. So example a delta of .2 of call indicates that for every 1 point change in the underlying, the price will move .2 (3/n)

For option writers who want to trade in neutral strategies like straddle, strangle, ratios, calendar etc, delta can be very helpful. So be it any complex strategy, knowing the NET DELTA can give you an idea of how your strategy will perform in different scenarios. (4/n)

Net delta is just the sum of the deltas of all the bull options (call+ & put-) minus the bear options (call- & put+).

So if we can track this, we will always be in the know of how much exposed our position is. It makes it easier then to adjust our position. (5/n)

A THREAD:

BEST OPTIONS STRATEGY FOR CONSISTENT INCOME -

OPTIONS WHEEL STRATEGY

Everything to know about this strategy I'm posting in this thread.

(1/12)

Step 1: Stock Selection

1. For this strategy you're going to have to choose some stocks that you think will be doing well in the future/long term.

2. Stock must be in an uptrend.

3. Stock options should be liquid enough to trade in.

4. List of stocks attached

(2/12)

Step 2: Which option to sell?

1. Sell put at a support according to charts.

2. Sell put at a strike far away from the spot where you think the probability of the stock falling will be very very low.

3. Sell put at a price where you're willing to buy the stock at.

(3/12)

Step 3: What to do when in profit/loss?

1. If in profit you can just roll up the puts thereby increasing the ROI or shift to other stocks to make more profit.

2. If in loss take delivery of the shares equivalent to the lot size in cash market.

(4/12)

Step 4: What to do after taking the delivery?

1. Sell calls to lower your cost price of the stock. For eg, you took delivery of Reliance at 1900, sell 2100 CE which is about 10% away.

2. Keep doing this till your CE expires ITM and then give delivery of your stock away

(5/12)

A THREAD ON SL, TSL AND RE-ENTRIES-

WHERE TO PUT THE SL-

1. NEAREST PIVOT/SWING POINTS-

Normally I use this method for placing sl, In this method we use swing point for placing the SL.

As normally the stock would not try to go below previous swing point if it is to go in our direction.

2. ATR method-

Sometimes the Stock do not have any nearest pivot at time of buy, So we use this method as it gives us a level on basis of current volatility of the stock.

I use 1.5 ATR away sl , say the ATR at point of entry is 30, so I place sl
1.5 X, or 45 rs away from entry

In below example the entry is 120, ATR=5, SL= 1.5X ATR= 7.5 OR 113.

Nearest pivot was too far away, that’s why this method is used in these cases.

4. Anchor candles-

Anchor bars are those which have extreme Volume, gaps or wide Ranges.

Here, we place our sl below those candles which has the above characteristics.

Trendline is basically use for majoring trend 📈 of any stock.

It is also useful for indentify demand & supply ....

Here it's applications 👇

➡️It is formed when a diagonal line can be drawn between a minimum of three or more price pivot points.

And that all three points must tested equally.

example 👇 #sis

➡️ Trendline is mainly useful for identifying trend 👇

⚡Uptrend - #happiestmind

⚡Downtrend - #bluedart

➡️ It is also useful for support & resistance.

Ex - ⚡ #happiestmind

⚡ #omaxe

➡️ If three point 📍have not be touched clearly then it is wrong ❌

Ex - ⚡ #bluedart

⚡#zeemedia

William's Alligator is probably the most underrated indicator in moving average category.

Alligator follows the premise that market is sideways for 70% of the time and trending only 30% of the time.

This is where William's Alligator can be a great tool for traders.

Why William's Alligator can be a great tool for traders?

It can identify Bullish, Bearish and Sideways market pretty easily. Problem is, traders don't know how to use it effectively. Alligator has three lines:

1. Lips - Fastest Line
2. Teeth
3. Jaws - Slowest Line

Book Interpretation is when Lips Crosses above Jaws, it's a buying opportunity and when below its a shorting opportunity. And when three lines are crisscrossing, instrument is sideways.

BUT this does not make it a tradeable indicator in practice. Here is what should be done.

Firstly, when all the Alligator lines are moving up or down and are widening, this phase is called "Alligator eating with its mouth wide open". When the lines are crisscrossing, this indicates the alligator is sated.

Now, how to use it? with Basic TA and Indicator like MACD

Rules to remember:
1. As long as price is above Alligator, BANKNIFTY is bullish.
2. As long as MACD is trading above 0 line, BANKNIFTY is bullish.
3. Horizontal Lines are the only S&R.
4. CONGESTION is followed by TREND is followed by CONGESTION.