An inception [20th May, 2020]

This article marks an inception in a dual sense. The first one being the first article in the blog, the other one depicting the first trade of the day. The portion noted down is a post-mortem analysis of the trading diary. It is an extract taken out of a profitable trade.

This is the instance wherein the open of the first candle was not equal to high/low of the candle however a trade was taken. Such a trade requires a bit of provisions to be in place. The first lot size was smaller. 2 lots of nifty 8500 Call Option were purchased at Rs.505 at 9:25 am. Stoploss was set and a smaller movement of around 10 points was captured. It can thus be classified as a scalp trade.

The above is how the Nifty 50 chart looked after the formation of first 15 min candle.

The rationale behind taking the trade within the first 15 mins is to capture the high volatility which may be absent at any other time during the day. The first candle opened at a trend line support, thus a long trade was entered into. The reason behind capturing a smaller price difference is because it had already hit a long term resistance at 8966, thus the price could have a falling tendency. Hence a scalp trade was preferred.

The following is the screenshot of the closed positions at the end of the day. Have a look:-

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