Learn to Determine the Market Range | Option Trading in Share Market

So now we were talking about making this view that market will be bullish, bearish, sideways So the question was how far will it reach How much momentum is that bullish momentum Okay, the scalpers in the market want to catch 30, 40, 50 points If they get 30, 40, 50 points in their favor, they think we will make money and we will exit and take another trades for those people, this till when concept is good according to a range Why?

Because if you know that I have support at 17800 and resistance at 18000So if the market falls below this and there is a price action, then you have to take from there It’s not that you take from 18000 only, what the market generally does is that it tries to fall 20-30 points below 17800And we will see from there that recovery of 30-40 points comes immediately

So if there is a price action there, it becomes necessary to catch it hope you know basics but we will talk about that So if you want scalping from here, it is good to buy from below support because your stop loss is also very minimum10-15 point stop loss and you can go for 1 is to 2I am saying minimum 1 is to 2 or you can trail Sometimes it can be 50-60-70 point momentum,

so that 50-60-70point momentum can go up to 1 is to 4-5So this is the beginners, I am taking beginners in mind Because you will not hit a trade in between, you will not hit random trades Now what is the logic you have? Before you were taking a trade, your first logic came that I have seen option chain

And after seeing option chain, I am not saying any complicated tools to understand, just simple free things which are available on the internet The information which is available to everyone, we are talking about that So we are talking here that you have seen option chain, identified resistance support, you have also seen what is more strong So you will also know what is the probability of breaking

You will understand that resistance is strong So these are the basic things which you will know, if the market will come above this, then you can get a reversal very fast So if you will get this, then you will get a trade Now I am saying the same scenario for bearish also above 18000Now comes the matter of sideways, now till the time the markets within my range So can I take a trade according to my range

The maximum money you are going to make, you don’t talk about putting a sector here Why I am using this word speculation, putting a sector Because people who come to the market and want to double, triple, and five times their money, it doesn’t happen by joining hands There are trades, there are trades on which your sixer will be put But it will be put on every ball, it is not written anywhere

So don’t play G20 as soon as you come Now I will tell you where is our focus, I told you a simple setup of scalping Now we will take a little time towards this market Because Annand told you in the last blog that you will see the market sideways 75% of the time And that is within a range bound, till the time the market is there, you see how you can make money When the market breaks this range, actually after that, this trade is made

And what do you want, I will trade this with you every days when the market is 75% sideways and you will rotate it in, you will see frequent stop losses You will have frequent stop losses and you will get worried So loss disturbs a person’s psychology a lot You will get confidence from profits, even if it is small

So let’s start to make some profits now Now let’s talk about profits, come Now for profits, we will talk about sideways So what is the meaning of sideways, the market is within a range We have seen a small range here, we have seen a range of 18000to 170000, 800, 200 points But now what is important for you to understand, see this

So now we will understand one thing for sideways And for that I will show you a small concept here You will have to understand IndiaVix, I will write IndiaVix here on Googles a number will come for you This number is very important for you, you can google this number, you will see a number When you see a number like 13, basically what is VIX?

VIX Is a volatility index will tell you in very simple words How much the market can grow and how much it can break in a year That IndiaVix tells you Today where the market is, IndiaVix is telling you that within year, the market can grow 13% and break 13%Within a year Now you say according to 300 days or according to trading days, it is a year

So you understood this If I have to explain to you that this is yearly volatility may be going a little bit close but it is important So if I talk in a month Now we are going to learn in this blog See our setup has changed, so our motivation has also doubled You also double your motivation We are going to learn how to work in the sideways market with options Let’s goal right, so now we are in continuation

Now you have to understand a new concept, many people already know And that is IndiaVix, you will write IndiaVix on Google, you will get the number But the importance of this number is very high So here, when we are writing a blog, you are seeing IndiaVix13, what does 13 mean?

It means that within a year, how much our nifty can grow and how much it can breaks it is on both sides, it is not that it will increase or decreases it is showing the volatility of the markets IndiaVix is a volatility index Now in a year, nifty can increase 13% and 13% can break Can I tell you a fun thing?

Many people will be there, your friends will be there, ask them Bro, nifty, how much can it increase in a year and how much can’t break? They will say we don’t know Then you can explain to them IndiaVix Because the number of IndiaVix only tells how much it can increase and how much it can break but this is of the year

Say 300 days or according to trading days The point is that if the number of a year is 13, then how will you calculate the volatility of a month? Now again this is my question to you Look, I am asking a question, but after that I will also answer or how will you calculate the volatility of a week?

So it is a very simple formula, you can do it yourself on your calculator So what you are required to do, I will show you here So how many days are there in a year? You will say 12So you will take the square root of 12 here Which is 3.46So what you saw 3.46, now what will you do?

13.08 divided by 3.46You have the number 3.7This 3.7 is the monthly volatility Nifty can increase 3.7% in a month3.7% can fall So this is our range of a month Similarly, what can happen in a week? You can also find out How will you find out? You simply have 52 weeks; you will take the square root of 52Now 7.2 came and now 13.08 divided by 7.2So which is 1.8

So the volatility of a week is about 1.8%Now this 1.8% number has come, now what will you do about it? Let’s see this too So for example, Nifty is at 18000You minus 1.8%324 points, maximum Nifty can break from here Means Nifty will not go below 17676 as per the VIX

According to today, you are finding out the range of Nifty How much can go below? Around 17670And it is the same for above You can do 18000 plus 1.8%324 points can increase, so 18324 can go in a week Now what happened with this? You found out that if you want to stay on the safer side

That the market does not go above 18400And the market does not go below 17600Now it will go up and down in the middle But the maximum time will be in the middle of this range Most of the time you will see in this range If there is a panic like situation in the world, then anything can happen

Then your VIX will also change, the figures will change It will increase immediately So if a bomb blast or a disaster happens somewhere So whatever will happen, the volatility of the market will increase Maybe the VIX will go up to 20-25Now what happens, here you have to understand one more concept

There is one very important thing in your premiums, I will show you When you go to the option chain So here we talked about OI, change in OI, volume There is also an I What is this IV basically? Basically, the IV that is running here now, the IV of 9 is 2lessThat means the IV inside it is very less What will happen with IV now?

You have delta, theta, gamma, Vega, all these names The option is Greek, we have written blogs on it before But I will explain to you again in short The theta is in favor of the seller and against the buyer The theta favors the seller, but the IV favors the buyer If you have bought an option here Whose IV is 9 and nothing has happened in the market

And the volatility has increased from here So what you see here, the last traded price LTP will also increase As the IV increases, what will happen to you? The price of the option will increase.

So if a buyer has bought it, suppose it is of96 and it is of 104, 105, then what will happen, the buyer will benefit without doing anything without any direction and if the IV was too much and the IV would have been less, then the buyer would not have known, but what would have happened, the premium would have been less.

I will give you an example. On any budget day, in the morning, you will see that thieve is too much, too much because the market goes in any direction. So what happens now is that this premium is too big.

Similarly, on the day of the election, when the results coming, the market is sitting with high IV at that time, the premium of the option and when the result has come or it has happened, the major announcements of the budget have come, the IV breaks a lot.

Now who is at loss? The buyer is altos. Now whenever you have seen IV of less than 10, then you have to understand one thing that it is in the favor of a buyer and if you see IV of more than 18, then you can understand that a good setup can be made for selling from here.

So IV is a matter of volatility, but you know the range. Now because you have learned to find the range, I hope you have learned it and if you have not learned it, then read this blog again. So if you have learned to find the range, then now we come to our first concept. Our first concept was that we said that the market will look sideways 75% of the time.

What does sideways mean here? You have taken out the range. For example, we have talked about the market at 18,000and we have taken out the range, let’s take a safer side that the market does not go to18,400 and here it does not go to 18,400.

We have made a range of 4400 points for ourselves. Now what should I do?75% of the time the market will not break it. You can try and test it as much as you want. 75% of the time the market remains in this range. Now because it remains in the range, then you have to see if you are new. Now this series is starting.

If you are new, it does not matter to me what you have seen, what you have thought, you have seen crores of rupees, what you have seen, I do not know. What is important is to earn profit. It is not important how much profit to earn. In starting, you should make some profit that you have confidence in.

You should have some bread-and-butter strategies that will earn your money regularly. If you want regular income from the stock market, then you understand that 75% of the market is sideways. So capturing this sideways market, can you make some good setups? You can learn some strategies.