So I am writing this blog specially on the day of expiry. Today’s Thursday and today want to give you some crucial information. Such information through which you can minimize your losses. I am sure that those who have bought the options, in fact, if you trade against the trend, then you are doing a loss.
Today I am going to tell you something through which you can reduce your losses. Your losses will be very less and when there will be profit, it will be very much. For that, first look carefully here. What have we done? I have taken a super trend for you. You already know the settings of super trend that I use. I will show you.
So the setting of super trend that I keep is20 and 2. So the setting of20 and 2 is that you can change it. So you can see here that our downtrend is continuously going on. Now what do people see? The market has opened, the green candle has been made, after that there are many theories of people, they take trade.
But here I will tell you that here I have taken another indicator that is pivot points. So pivot points, you can see that I have taken pivot points. I will show you by putting and removing both. I have removed this and here we have put a pivot. So what does pivot do for us? It provides us with the crucial support and resistance of the market.
So what we saw that the market went from S1 to S2. As soon as it broke S2, the market went toS3. It broke S3 and went to S4 and if it breaks S4, then our assumption is that the market will go to S5. So you have5 support here. Now what do people think? People think that if it has broken S1, then it will bounce back from here.
Okay, it broke S2, it will not be able to go below S3. So people always wait for a reversal that there will be a reversal. But you people know that money is made with the trend, money goes against the trend. Now this is basic knowledge, everyone knows this, but there is something that is very important for you to know today for which this blog is being made.
I don’t want people to cry tears of blood, that means they have big loss and why it happens because you are expecting a reversal, but you are leaving very important thing. We gave you training on the option chain. Now I want to show you something. There is a very important thing on the option chain that is PCR.
This is highly important to understand because if you do not understand Prank you are trading in options, you are going to lose a lot. So here I have Nifty’s put call ratio. We can make it ourselves. I have seen that on the internet, people give a lot of assumptions about PCR.
They tell in different ways about PCR, but I tell you an important thing here. The important thing is that the put call ratio that we are taking out here, the first thing is that wearer not taking it out of open interest.
You will simply write option chain. You will come to the NSE option chain. What do people say? Look at the option chain and here you are seeing open interest. You are seeing the total of open interest here, but if you takeout PCR from this open interest, you will lose a lot. Now most people only see the total of open interest, but where do you have to focus? You have to take it to change in open interest, which is not available here.
Unfortunately, you will have to do it and there are many irrelevant strike prices because what is important for us is that the strike prices around the money are relevant for us. So this software automatically calculates the relevant strike prices for you. Like where the market was in the morning, 4 strike prices above that and 4 strike prices below the change in open interest is relevant for us.
Now here you see when the market was open, then how much was the PCR put call ratio. So here the data is updated. Now you see here at 9.30, the PCR was 1.11. What is 1.11 here? If it is above 1, then we have a view that the market can go up like this, but we definitely have to check. It is being updated every 5 minutes.
So what happened at 9.35? Has this PCR increased or decreased? We got a warning suddenly. The PCR has become 0.83. This means that the sentiment of the market is that the market may go up or down.
Now you have to track every 5 minutes where the PCR is going. Now assume that you have taken the wrong trade. You have taken the trade. You have traded in call options and legit options that the market will group from here.
You are feeling like this. You have traded on the feeling. You have not seen the price action. We have not explained support and resistance to you. We have not paid attention to it, but still the PCR gave you a warning that the PCR is going down.
After 0.83, itis 0.55. You have to get out of your position immediately and if you have not done this, then what will happen? Now we see that. So for sure, many people must have suffered aloes today. The day I am writing the blog, it is expiring on Thursday. The market is going down continuously.
The biggest indication of that is that the PCR gave at 9.35 in the morning that it became 0.83, then it became 0.55, then it became0.36, then it became0.34. The PCR is falling continuously and not improving. It is not improving; it is not increasing. It is falling.
What does it mean? Today the markets going to fall. If you have understood that the market is going to fall today, then at least you will not take the wrong trade. It is possible that you do not want to play Mandy when you fall, but if you do not take the wrong trade, then you will save capital. Now see what happened in the market.
The PCR is falling continuously and when I am making this blog, the P rate is close to 0.0.00.020.040.06 means it extremely negative. There is very little chance of going up and if the market goes up, then selling can come again from VWAP. I will show you. So I have not seen the chart for a long time. I am looking in front of you and I can tell you that the market is falling. See this, wow.
So now the markets going in front of you. The live market is going on. From here you are seeing that the market is falling continuously. Our assumption was that if S4 breaks, then the next target isS5. It can get support by going near S5. The market can stay here for a while and what is the PCR saying from here, there is no chance of going up.
So there is no chance that big bounce back will come again because PCR is extremely negative. If you see PCR extremely negative here, then it means that you should be careful. So here, what is important, suppose a bounce back comes from here, then what will you do? You will not think that everything has improved, buy it. PCR is negative.
If the price goes up, then some green candles are made, then itis made to trap you. It could have gone a little higher because the market tries to touch VWAP once. Many times it will try to go near VWAP, but if the market does not come near VWAP and if it comes, then it does not mean that the market will go up.
On the contrary, you will see the market going down because PCR has not improved. This is highly important to understand the PCR. Now this 0.06, 0.04, it is an extremely negative situation. Similarly, I would also like to show you that when the market goes up, you see that the market is going up, as it was in this situation.
So I would like to tell you that the PCR was extremely positive. Extremely positive means that 200-300 Proms and that PCR is irrelevant for all the strike prices. We just have to look at 4 strike prices up and 4 strike prices down and what is the change in it? You have to understand where the sellers are entering and where they are leaving.
If PCR is negative, what does it mean? If you see that PCR is negative, then what comes again? 0.00 comes. There is no chance that the market will group today. Everybody, what is here? Look, PCR means put call ratio. People say change in, what do people say here? Open interest put side divided by open interest on call side. This is wrong.
The PCR you are seeing here is change in open interest. The change in open interest in put side divided by change in open interesting call side. This is how your PCR is coming out. So what is the change? You understand, the put writers here ran away. Ran away means either someone will sell, then someone will buy.
What happens in the market? Let’s understand the concept first. Concept is this. So what you see in the market is, I will show you. So we said how PCR is coming out here, that change in open interest, which is happening on your put side, divided by change in open interest on the call side. Now see what is happening.
If someone has sold put, when do we buy put? When we buy put, when we think that the market will fall and when do we sellout? When we think that the market will rise. So the seller, who has more capital, what does he see first? What are the chances of the market rising? Because he will sell only when there are chances of the market rising.
If he does not sell, he wants to leave. He says I will not sell because he feels that the market will fall. So on the upper side, suppose there are only two people standing here who are saying that the market may rise from here, so I sell the put option and here 200 people are saying that the market will fall. When it falls, the buyer will benefit, the seller will lose and the seller does not want to lose.
So what is he saying? When the market falls, then the one who has bought thecal will be at a loss. So what I do is I sell the call. So I sell the call.it, if it was the opposite, then you would have got the answer of 100 PCR. But what will come now?
Now you will get0.01 PCR. What does this mean? The seller has run away from the put side and where have all gone? They have gone to the call side and if we go to the200 people who sell put and 2 people who sell a put.
If you divide call side, then if the market increases, then the seller will be at a loss because the seller will be at a loss. So in this situation, if the seller is at a loss, then what will the seller do in this situation? The seller will not sell put, he will only sell call. And PCR shows you exactly this. I will show you.
What is PCR trying to show? People have left the put option. They have not done the selling in the put option. Open interest has changed there. So open interest is 0.00 and it is changing every 5 minutes. Youkan also see every 15 minutes. So similarly, this is Nifty. I will show you Bank Nifty. So if Bank Nifty is also doing, I am not seeing the chart in front of you.
What I am seeing is that PCR is extremely negative0.24. So we open the chart of Bank Nifty in front of you. Andy opening the chart of Bank Nifty, without seeing anything, I can tell you that the reason why Bank Nifty is increasing is because of its PCR.
So PCR is an early indicator for you. It is indicating to you what can happen in the market. In the market, you have to see that if PCR is in your favor in the market, if it is in favor of your trade, then it is very good. You can stay. You will get confidence.
If you have done a sale from Mali, you have sold it and PCR is also negative, then you will get confidence. Yes, my trades fine, but if you have done sale and PCR is negative, then you have to be careful and you may be having a loss. PCR is showing that it is negative. It showed you in the beginning.
Suppose when the market was open, then PCR was positive, but after that, as soon as it started being negative and it did not recover, it is possible that you are having some loss of 500,000, 2000,you have booked, but if you do not book, then it is possible that you could have a big loss. But if you take a right trade after that, understanding PCR, you can make money.