Chart of Accuracy with Option Chain | Part 1 | Investing Daddy

So today you will be very excited because we told you in the last blog that today you’re going to learn chart of accuracy. Now, in this also, sir,1.0 and 2.0, there are two different theories. We will explain both. So sir, let’s start with your chart of accuracy in which we do not need to see the chart. There is no need to see the chart in the theory of chart of accuracy. Basically, why did the chart of accuracy theory come into being?

The reason behind the formation of the chart of accuracy theory was the movement of the chart of accuracy theory. It was a movement of open interest and volume. When I started tracking these movements, means continuously I kept watching specific movements for 3-4months, how it happens.

What happens is, like we have eclipse, so scientists have very little time to study the eclipse. Why? Because it will come, then when it will come the second time, I do not know. And when it comes, it will come after a long time. Right. The same scenarios of chart of accuracy are there. One scenario may come, then it may take 3months. After 3 months, this scenario is repeating. So, to study it, that particular day is there.

The day it has come and many times we will study it, then we will reach a theory that this is a particular theory. So, you can understand how much time it would have taken to make 9scenarios. In understanding 9 scenarios, the whole market is focused on this.

It is not different from this. So, let’s try to understand this. So, now when we try to understand the topic of chart of accuracy 1.0, then there are 9 different scenarios in itself that we have to learn here. What movement am I talking about here?

First thing is this. Aim talking about the movement of open interest and volume here. Let me remind the audience that what we talked about in the last episode that if volume and open interest are together and are traveling towards out of the money, then both will travel, then we will consider it as travel. This travel is visible to you with yellow colored arrows. And if we are traveling towards in the money, then if one also travels, then we will consider it as travel.

Either it is strong, which is not traveling anywhere, or it is traveling, then it is marked with yellow color. So, we have to see this, we have to understand that basically where this travel is coming. Once we show the option chain. Yes, we understand it by showing in the option chain. Now we come to the option chain.

We were talking that day how we were talking that this is our support and resistance and this resistance is trying to travel this way. So, because here it was only of volume, so volume is trying to travel. So, here you will see a yellow colored arrow. You will see its symbol like this. If 18,500is 32,000 and instead of 23,000, 24,000, 25,000, 26,000, whatever is happening, then it is moving.

And how is it moving? It is moving in the direction of this arrow. So, now in the option chain, what is the top and bottom? It is very important for us to understand this. The smallest strike price in the option chain is bottom. This is bottom and in the option chain, this is top, which is the biggest strike price.

Now if you look carefully, then where is this volume moving? It is moving towards the top. So, what do I call this? I call this weak towards top. Means this volume is weak towards the top. And if this movement was on this side instead of this side, then what would I say? Weak towards the bottom.

Mean sit is weak towards the bottom. When this volume, highest volume, shifts from here and goes to a strike price, then we call it weak towards top. And when this highest volume, whether it is call side or put side, shifts from here and tries to move towards a bottom strike price, then we call it weak towards bottom.

Towards bottom. Yes. And I show this with the yellow color arrow. And when we come to this in our chart of 1.0, then you can seethe with the yellow color arrow. What is visible here? You can see many tops and many bottoms. What are the movements? Now we try to understand this basically. What is this? Now the first scenario, scenario number 1. It has a total of9 scenarios.

And remember, believe me, whether we talk about stocks, whether Nifty, Bank Nifty, or Fin Nifty, I have never seen the market outside these 9 scenarios. You have never seen in your life. That trade in the market. What will it say? You can see CEPE written in many places. Okay. That somewhere is written, somewhere CE is written. So now what we have to-do according to what it says is to take a trade.

On one side, I have written trading at EOS, which means trading on extension of support. Right. Support can be a little confusing here. Support is written up here and resistance is written down. This is according to the option chain. If you look at the call side, then resistance is made below and support is made above. So this is according to the option chain.

So whether we have to take a trade on support or not, or whether we have to take a trade on resistance or not, this chart of accuracy will show you1.0. In its 9 scenarios. First scenario, scenario number 1. What does scenario number1 say? When support is strong, resistance is strong, means movement is not happening anywhere.

Y and volume are not moving anywhere. In such scenarios, whenever the market comes below its support, you buy. There is no problem with the call option. The market will go up. And whenever the market comes above its resistance, you buy the put option. There is no problem. The market will fall. If you trade in cash, then buy in cash.

Whether it is stock, whether it is nifty, whether it is bank nifty, whether it is fin nifty. Now let’s come to this scenario number 1. The market is not going to break anywhere here. But generally, when such a scenario comes, then what generally happens in the day?

In such scenarios, the market will remain till half day, 12.30, 1 pm and after that, slowly, slowly, slowly, it will move to some other side. Some other scenario. Yes, the market will come in some other scenario. So once, twice, you took a trade and there was a profit in it. Yes, you took a trade twice, three times. Like now, I am talking about last Friday.

So last Friday, we took a trade five times. After that, the movement was shown that the upper side is happening. I will show you that too on the option chain, how it is happening on the upper side. Now let’s comet scenario number 2. In scenario number 2, now support is strong. What I was talking about a while ago that support is strong many times, but still people think that this support will not break.

So generally, what do they do? They buy the call option. You should not buy the call option. If the resistance is weak towards the bottom, now suppose that we come back to the option chain. Now suppose that the resistance is here in the market, where it is at 18,000, at 18,700, somewhere resistance is there.

Now in such a case, and suppose support is at 18,500, this is support. When will this support break? It is not necessary that the support is weak. If this resistance is weak from 7000towards the bottom, suppose that the pressure starts to create here, then it will break this support. It will push it back and then you will see a new support after half a day.

There is no doubt that it will not be seen. Now in the beginning, we do not see it. So what we do? We take a trade. So this is a prediction. This is a prediction of open interest and volume. A new volume will be created after half a day, after 1 o’clock, after 2 o’clock.

There is no doubt that it will break. So what we have to do that day, we do not have to buy here. Because if we buy and then suddenly YI, then we will be trapped, we will be lost. What we will do better than this, whenever the market will be visible at its top, because 500 is our resistance, so whenever it is visible above 500, a new resistance is being created.

So when it is visible going a little above 500, we will sell from there and if we sell, then what will we get from there? We will have to explain weak towards the bottom once. Ianthe example of 18700, it will not be clear to people. You told me weak towards the bottom on the call side. Explain that once. We were from the port side.

Explain this one once and then explain this one too. Now understand the meaning of weak towards the bottom. Like suppose resistance, this 13 lakh is not here. Suppose what is here, it is 53 lakhs. Example is fine. 53 lakhs. This is 53 lakhs and here we are seeing 32 lakhs. So if 32 lakhs are visible, then it is not weak towards the bottom. But suppose it is 49as it increases from 32. Now what has happened to this resistance?

The resistance that was 700 earlier, now itis being created at 500. The new resistance that is being created from the beginning, which side is it? Our bottom is here in the option chain; our top is here in the option chain.

So where is the new one from the beginning? In the context of the previous one, the new one is towards the bottom. That is why we called it weak towards the bottom. This resistance is weak towards the bottom.

Now let’s talk about the put side. Now here you can see the volume of 27 lakhs. If this 18 lakh volume increases to 21,22, 23, then the supports weak on this side and weak on this side. So now suppose this market started falling down and it came to 500. So what will people think at 500? Because here the highest volumes there, so they will think that the market will reverse from here. But since it is weak, it will not reverse.

In fact, where did that support go? 400.Means the market is now ready to fall down by 500 points. Now what will happen in such case? In such a case, what will we consider this support? Weak towards bottom. This support is also weak toward sits bottom. If this support, this support, here is the support of 27, 91,000.

Here is the support of 21, 97,000. If a new volume was created here, suppose of 23 lakhs, which is in the money, then this support would have been weak towards the top. So these different scenarios, if you look here, you will understand what these scenarios are. Now where to buy call, which day to buy a call, which day to buy a put, or how to convert yourself after half a day, we can see here.

Now let’s look at these scenarios. The first scenario, when both support and resistance are strong, then buy a call, buy a put, you will get trades from both sides. Buy a put above every resistance, buy call below every support.

If the support is extremely strong in itself and the resistance is weak towards the bottom, that means resistance is creating pressure towards the bottom, towards the support, in such a case, that support will break. So do not buy on such support.

Whenever you get top, whenever the market is towards resistance, above resistance, sell it. Once it has come from above resistance, it has gone again, it is above the previous strike price of resistance, then also sell it. That means whenever you get top, sell it. Those who see price actioner charts, in price action charts, they say ascending or descending, it is getting top now, so keep selling, the market will keep selling easily.

Now suppose that the markets on its support and support is weak in itself.to shift higher. This is the rally day. This day, there will be a rally. And this day, there will be bearish rally. Means, the market will break down. So, this day’s rally will be small. In the comparison of what will tell you later. This day, there will be a rally.

This rally is of almost how many points? It is of almost 100 points. And this rally below is of almost 100 points. This rally will strong. But the resistance is weak towards the top. Resistance be up to the point where it is weak toward stop or weak towards bottom. It is a rally of almost 100 points. Means, the market goes ahead crossing the second strike price from one strike price.

And if we come to this rally in the option chain, then this is the best part of it. Now, what I am telling you, he will see very carefully that how far the market will go up. Now, I will tell you. Suppose, the resistance you are seeing here is of 32,95,000. Suppose, it is weak towards the top up to 600.When it is only weak towards the top, I am not talking about shifting, it has not been the highest, till then the market will go above 550, will be below 600.

It will reverse from there again and again. It will not go above it. When it is weak towards the top at 600 and shifted at 600, if shifting is done at 600, then it will go above it. In such a case, the market will go above 600 and reverse from there. Now, suppose you want to find out that a very big rally is going to come someday. How do we know that? What happens on this day? We can see the resistance in the market at 500.

And this is weak towards the top, suppose it is at 800. Now, it is only weak, in such case, the market has the ability to go above 750. And if it becomes the highest while going there, then the market will go above 800.If it does not happen, then the market has the ability to group to 750. In the same way, in the case of going down, suppose there is support and it is weak towards the bottom.

How far? As far as the bottom will be, one strike price will go to the market before that. In the case of weakness, and as soon as the shifting happens, the market will shift below it. Until the shifting is not done, it will never go. You pay attention to this. It is a very interesting thing. It will not go, it cannot go. It will start struggling there. And it will go only when it is the highest. After being the highest, the market goes up to that. Volume.

Volume. Or whatever resistance, whatever support, weave read in the previous episodes. We will have to revise it again and again. Who is being talked about here? Okay, now let’s come back. Let’s see where big scenarios are made.

And I will tell you that if you have not seen the previous episode, then you can go and see it on obtain. And if you feel that something is missing in this blog, you are not getting clarity, everything is being taught withal lot of time.

So that your concepts will be clear. I have told you, maybe once it has gone out of the head. Read it a second time, read it a third time, the concept will be clear. Look, when a scenario is researched, it takes a lot of time to research. So when it takes so much time to research, then you should give a lot of time to learn. Not once, not twice, not five times, not five times, not ten times, read this blog a hundred times. Read it! Now let’s go, we try to understand. Scenario number four.

When the resistance is strong and the supports weak towards the bottom, the market will break down again. How far will it break? Where the next support is shifting. It’s one strike price is up to the first. And if the whole shifting is done, then the market will continue to break there. That day we do not have to buy, we just have to buy. Do not think that if it breaks there, then I will go there and waste time there. How time is wasted, I will tell you.

Like suppose, we come here again and see. Suppose that this supports weak towards the bottom. And here this support is weak towards the bottom. Where is the support weak towards the bottom? Suppose from here, it is weak towards the bottom. So now we do not have the mood to sell. I mean, we do not have the conviction that whether we sell or not, whether we sell or not. This happens many times.

So what do we do in such cases? We think that okay, it is weak towards the bottom, then it will reach 400 or 350. If it falls below that, then I will buy from there. In this way, your time will be wasted. How will the time be wasted? Suppose the market reached thereby dragging and dragging. And the time is 3 o’clock, 3.15 o’clock.

What will you do now? You will not be able to do anything. You will be idle all day. It is better that you sell from the top. You will keep getting money. So always take care of this thing. Now let’s talk about the next scenario. Our next scenario is scenario number 5. Here the support is strong, sorry, the resistance is strong and the support is weak towards the top.

In such cases, the market is creating pressure upwards. We do not have to sell anywhere that day. That day we will buy from the bottom. And such scenarios also happen many times in the market. Such scenarios are very interesting and fun. Many times open interest creates such scenarios more rather than volume.

Open interest creates such scenarios a lot instead of volume. Now comes the dangerous rally, which is called bloodbath and bull run. Where the bull will run, the bull will run and there will be bloodbath. That is this day. Let’s take Bank Nifty. Now let’s try to understand the support resistance in Bank Nifty.

The biggest open interest and the biggest volume that you can see in Bank Nifty, we can see on the left side at Rest. 43,000, Rest. 1,82,000 and on the right side we can see at Rest. 41,00,000 and Rest. 1,23, 000.

So what is the support? Support is Rest. 43,000 and resistance is also Rest. 43,000. Now suppose someday, there is no such scenario here, suppose the resistance is at Rest. 43,300. Suppose there is resistance at this place.

And suppose the support is at Rest. 43,000. Now this resistance is weak towards the bottom at Rest. 43,000and this support is weak towards the bottom at Rest. 42,600. We have to explain this. Give some time to this. We have to tell people again how it will be weak towards the bottom.

Try to understand how it will be weak towards the bottom. It will be weak towards the bottom like this. Suppose this volume the highest here. Now we can see 37 lakhs. Forget these 37 lakhs. Suppose this is not 30 lakhs, it is 60 lakhs. I will write 60 here. This is 60 lakhs and this is 37 lakhs. If it is up to 37 lakhs, then it is fine.

There is no such weakness towards the bottom. It is 40, 45, 46, 48, 49, 51. Now we will start believing that this resistance is creating pressure. At what strike price? At the strike price of Rest. 43,000. This means that the market that was going to stop at Rest. 43,300will stop at Rest. 43,000 if it is coming from below.

What is this resistance? Make an arrow. Make an arrow from the highest to the second highest. You will know. If the direction of the arrow is this, then we will call it WTB, weak towards bottom. If the direction of the arrow is this, then it will be called WTT, weak towards top. Make an arrow. It is not difficult to understand WTB.

It is a simple thing. You have to make an arrow from the highest to the second highest. This is the highest, this is the second highest. Make an arrow. Now tell me what is this? WTB. If the arrow is made downwards, it is WTB. If the arrow is made upwards, it is WTB. Here, see, the highest to the second highest.

This is 41 lakhs; this is the second highest. Tell me what is made here? WTB. Remember that the bottom is herein the option chain and the top is here in the option chain. So, the direction in which the arrow will be made, that is the WTB. Now our scenario was that when the market falls, then both the arrows will be made upwards.

Now suppose that where is our resistance? Our resistance is at43,300. Forget 20 lakhs. Suppose here it is 60 lakhs. And the supports at 43,000. This is 41 lakhs. Now this resistance, this 60 lakhs, suppose here it is 52 lakhs. Means what happened to this resistance? The highest to the second highest arrow was made and it became WTB.

And suppose this support is weakened from 41 lakhs to 42,600. Suppose it is weakened here and what happened in the market here? Suppose the support is 32 lakhs. Now what happened to this support? It became WTB. This is the day of heavy fall.

I tell you, in such cases, such cases happen many times when the market is standing at 43,000 and 300.And you can see that this is weak towards the bottom. Means it is seen that this market is at 43,000, 300 to 600.This is going to be a fall of 700 points and it is clearly visible. When it is to happen, it starts to be seen from the morning.

Now this is the rally of 700.If you can catch it, then catch it. Leave it. This market will go down giving full bloodbath. And will go on going. And how far will it go?600, below 600, 500 and below 500, it will go to 400 something. Extension.

It will go to the extension. It will be fully extended. And this is such a big fall and it is very easy to catch it on the option chain. If you take a little, you have to practice a little.

Without practice, you will get a headache. If you want 700 points, then you have to do it. You should understand the option chain. Now let’s talk about the next scenario. Which scenario is such that we do not understand or where we should not trade? That is scenario number 8 and 9. Same number, similarly, the scenario is heavily bullish.

The day the rally is going to come, both the weeks stop towards that day. And the scenario is heavily bullish. I want to make a scenario of the market that was running on last Friday. I want to show the scenario of last Friday. How is the scenario of last Friday? Look at the scenario of last Friday. Let’s open Nifty or Bank Nifty.

Let’s open any of the two. We will see the scenario. If we look at Nifty on last Friday, we could see support at 500and resistance at 500.What happened on this day? This resistance was slightly weak towards the top. And what happened to this support?

This support remained strong here’s what happened in such a case? The market went to the last and became bullish. Look at its charts. It went to the last and became bullish.

Look at the charts. How much this market will be bullish? Maximum bullish will be above 550.Above 550. Now the whole day is over. If the day continues, then this market will be above 550.It keeps going. It keeps going like this. Slowly. Similarly, if both, if support also becomes towards top, then this struggle does not happen.

In such case, what happens? It jumps. And if this register shifts to 600, then what happens? The market still jumps and goes above 600. So, there are many scenarios. Now, if we talk here, if we come back to our option chain, and here we come back to the chart of aggressive, so how many scenarios have we seen so far? We have seen 7 scenarios where we also found out when the market is going to be in a fixed zone.

In the second scenario, we found out when it is going to be a little slight bearish. In the third, we found out when it is going to be slightly bullish. In the fourth scenario, we found out when itis going to be extra bearish. In the fifth, we found out when it is going to be extra bullish. In the sixth, we found out that the bulls stayed down and in the seventh, we found out that the bulls stayed up.

But the market is also such that sometimes not taking a trade is also a trading in itself. That scenario is scenario number 8and scenario number 9. Especially for option buyers. What happens at this time? When the resistance is found out that the weak is towards the top and the support is weak towards the bottom. Orth resistance is weak towards the bottom and the support is weak towards the top.

Means both are opposite to each other. This is the time of the crowd of call and put writers when both are fighting each other. And whoever wins here will drive the market. Now, since both are fighting here, we never understand. We do not know in such scenarios that where the market will go. So, at such times, you should hold your trade for a while and wait that basically in which direction the market is going to travel.

Then you should wait for something to happen from the remaining 7 scenarios. Yes, it will happen. It will take a while. After that, someone or the other will win. It is not that both will always fight each other. If you see such a scenario many times in the day, then at the end of the day, after 3 pm, you will see when many times the writers of both call and put start fighting each other. Means at the last end of the day.

So, there is no time for buyers. What should buyers do from the market at that time? They should stay outside. It does not happen on Thursdays that the markets clear on Thursdays when the expiry is going to happen. Similarly, if we talk in the morning at 9.15 am, when data starts to be made in the morning, these scenarios are made at such times also. When build-ups are happening, then we have to wait.

So, we wait till 9.20, 9.25, 9.30 am. Let’s see which direction the market is going. It is not necessary that the market started and suddenly trade, trade, trade, trade. It is not necessary. Wait comfortably. Wait for your time.

Let the resistance of the market go up or let it fall below the support. And at the same time, you go and trade in the market. If you trade first or trade later, then what will happen to you in such a case? That you will be trapped, you will get stuck in the market, you will be emotionally trapped and you will be busy managing that positional day.

You will just keep managing. You will hedge, you will average, you will do something or the other just to save that position. But if you do not spend yourself before the time comes, I mean, I say here, do not spend yourself, wait. Did not spend and traded at the right time, then there will be no need to manage that position.

The market will come, the dot will come up, it came above the good resistance, it reversed from there, buy the put, it went below the support, it reversed from there, buy the call and keep trading and keep moving your trading forward in this way. Now you tell. So, according to me, people should see scenario 8 or 9 once on the option chain.

Absolutely, let’s show it on the option chain. That when they do not want to trade. Now we see this scenario, what will happen in this? Suppose that our 18600 is 23 lakhs instead of 18600, there is a volume of 60 lakhs. We have again agreed. This is the resistance. And our support is 1 CR instead of 18 lakhs. This is the support.

This is the resistance; this is the support. Now we have to say that we have seen 7 scenarios in the chart of the market. We know the scenario where what is going to happen. Now this writer is thinking that the market is bearish. So, the market is bearish, so what did he start doing? He started writing this one. 102.

This means, because of this writing, volume started creating here and here y started creating. So, this resistance weak towards bottom. Means, it became weak towards the bottom. And what does this put writer think? That the market is bullish today.

So, what did he start? He started writing this. What happened because of this writing? Here, volume started creating and y started creating. Now what happened? Resistance weak towards bottom, support weak towards top.

Today, the writer is not able to understand where the market is. So, we buyers do not have to know. It can be very specific range bound. The market can be range bound or if at any time of the day, suppose the call side writer is very heavily bullish, then he will run away and we will get stuck in our trend. So, what happened to take that trade? It became50-50.

Even if you buy call, there is a target. Even if you buy a put, there is a target. So, we can get stuck, can get confused. So, it is better not to take trade, wait. You guys fight among yourselves. Tell us who will win, then we will take trade. It is simple. So, let them fight first. This is our scenario number 8.

Means, when the support resistance is of each other. This can be another scenario. What will happen in such a scenario? Suppose, where is the support? This is the resistance at 500, this is 32 lakhs and this is the support at 500.This buyer feels like this, this writer feels like this, call side, that no, this market will not stop at 500, it will go somewhere at 600. So, it starts a new writing position here, due to which the resistance will stop towards the bottom.

Means, the writer feels like this, the bullish market of the call side and the writer of the put side feels like this, this market will not stop here, he started writing for this, that market will stop here. So, it is also towards the bottom. So, the writer of the call side is thinking that the market is bullish, the writer of the put sides thinking that it is bearish.

Now, they both do not understand that in which direction the market is. So, when they do not understand, then that market can move anywhere. Whatever will fall, it will move there. It is possible that the buyer will be specific on that day.

How will the buyer be specific? Suppose, a lot of buyers come and start buying here and make this volume very heavy. Buying, buying, selling, buying, selling means taking a lot of trades. Made it very heavy. In such a case, due to these buyers, this market will fall and go up to 400. Why? Because this resistance will become strong after a while and this support will remain weak and the market will move downwards.

So, these scenarios, these particular scenarios are how they make the whole market go up and down. It is better than that we are in such a volatile market or in such an unpredictable market, instead of trading, we follow the chart of accuracy and the chart of accuracy is 1.0 whatever it says. Putts screen on your wall.

Whatever you do trading, paste it in front of your trading desk. Whatever it says, we have to do that, otherwise we do not have to do anything. If you do not get the trade, then sit quietly. If you trade according to this, then it will never go wrong and the market will run according to this. Right. So, I hope you have understood 9 scenarios. But here is another surprise for you. The surprise is that this was the chart of accuracy1.0.

So, my friend, the picture is still left. The picture is still there. The rest is that if we talk specifically to the buyer, then the market runs well in these scenarios and runs very well. Sometimes the market becomes consolidated. I mean, now we are talking about all this move, whenever the movement is coming. Now the market has become consolidated in this scenario. It is stuck, the market has stopped.