Ten years before hardly anyone know about backtesting due to lack of right tools. But now the problem has increased multi fold because these tools made many traders get into automated trading but very few do it the right way. Out of these two system which one would you choose? Most traders inspite of checking all other parameters like Max DD, Expectancy etc, most give preference to total profits. People always focus on end result. But that’s a major problem when you finalise a trading system based on the overall profits in the backtest report.     Two types of system, both end ..read more

More than 30 million users actively use Trading view but very few people have Pine script coding knowledge due to which many users just stick to basic Trading view charting functionality, let me explain how can you write your own Pinescript code using ChatGPT free version. I wanted to study the spike patterns in BankNifty on expiry days, within 5 minutes if market moves greater than 100 points I wanted to track those days and see what happens after such spike, does market makes follow through move or it reverses after spikes? Go to ChatGPT and enter the below Prompt Create a Pinescript that c ..read more

There are more than 2500 mutual funds schemes in India which are managed by more than 45 AMC’s. Out of these, there are 30 different midcap mutual funds with total AUM of greater than 2.5 lacs crore which are being by managed by more than 400 Fund Managers across India. Most investors, when they try to invest in any mutual funds, they mostly go after performance track record. But problem is these fund managers don’t stick to one mutual fund house, just like us, they also change jobs. What seems to be the best mutual fund today might not be the best one tomorrow. So you can’t really rely on th ..read more

Year 2023 has been really tough for option selling, stop loss getting hit frequently, witnessing multiple reversals and lot many spikes. This is what most of the option traders have been complaining about this year. Did the introduction of daily expiry with different indices killing the backtest results? If we compare IndiaVix with 2017 vs 2023, its almost similar. But, year 2017 was lot easier for option sellers. What has really changed in 2023? I wanted to find out how many frequent spikes and reversals happened this year that people are complaining about. First, how do we sudden spikes? B ..read more

Seeing a chart pattern anyone can easily identify the difference between a trending market and sideways market. But I was wondering if there a way to identify it through quantitative mechanism? That’s when I read about The Kaufman Efficiency Ratio.  The Kaufman Efficiency Ratio trading strategy is based on Perry Kaufman’s market efficiency model as described in his book “Smarter Trading: Improving Performance in Changing Markets”. It is an interesting way to identify and measure the trend of a financial instrument. “The trend is your friend” is a classic trader saying. It implies that tr ..read more

This is going to be a series of article focusing on traders who wanted to get started with system based trading. With each chapter, I will explain step by step guidance on building the right trading system. Let’s get started with foundation of Trading System, we really need to understand this before we start building a trading strategy. People who get started with trading tend to think trading is the easy way to make quick money. But once they gather experience and if they survive long enough they will realize trading is one of the toughest jobs in the world. It’s not as easy as it looks. Wit ..read more

People say when they trade manually its hard to control their emotions, that’s why they started algo trading. But Algo Trading removes emotions is a myth, there’s no way we can avoid emotions in trading but there’s some ways you can control it which can improve your over all trading performance. Each Trade is unique: We always regret about the past or worry about our future. That’s human nature. We hardly live in the present, but when it comes to trading, we live way too much in the present, We worry too much about the present trade. How this trade is going to end? Will it end up in profits ..read more

In the last three weeks, I have attended three different option conventions back to back meeting 100s of option sellers. I was astonished with the number of option sellers and the kind of money people manage with option selling systems. Whoever I met, they are into option selling. And most of them started in the last two years. I was like It’s really huge, on one hand, I was really happy for people who are able to manage 100s of crores and also able to make consistent returns. But on the other hand, it made me really anxious. What happens if something goes wrong, will it create systematic ri ..read more

Running a single strategy vs running multiple uncorrelated strategies. If you ask me whats major difference between the two, I would say it greatly helps you to stay disciplined in the long run. Because single systems are prone to prolonged drawdowns, this is when most of the traders lose faith in their system, start doubting it and eventually quitting the system and they try jumping to new one.  When multiple uncorrelated systems are running with multiple instruments, the over all drawdown is grealtly reduced and also time dradown will be very minimal. It basically helps you sail throug ..read more

Many option traders are thinking that this extended trading hours could be the end of Option Trading. But this isn’t surprise news at all. SEBI proposed extension of trading hours in 2018 itself. It took more 4 years to implement it. In last few weeks, every traders worst nightmare is extension of trading hours. Trading is the only profession where from morning 9:15 AM to 3:30 PM, traders go through lot of emotional roller coaster ride. All day traders totally get drained out by trading 6 hours every day, and if it’s extended till 11:55 PM, everyone are worried they might need to spend more s ..read more