How to trade options-Mesh Analysis ?
How to Trade Options?
It is all about finding the right support level ( to buy calls) and right resistance level ( to buy puts) and then always having a stop loss in place which is in line with the market volatility ( so that you don’t keep hitting it and erode your capital). And at the end of the day if you are net positive, you have understood the science and mastered the art.
Here is how I do it –?Have been drawing these support and resistance lines for about more than a month now and have been extending these every day in line with market movement. What you see is a mesh of lines highlighting channels with key support, resistance levels and pivot points. I call this the Mesh analysis :)
And if you zoom in you can find it for a single day like below for today (01-Dec-2023)
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What I get now are the following –
1.????? Channels – Range bound market movement
2.????? Clear resistance and support lines
3.????? Pivot points indicating probable reversal
Rules which can be formed based on above analysis –
1.????? Use support lines within the channel to buy call options
2.????? Use resistance lines within the channel to buy put options
3.????? Be prepared for reversal at the pivot point ( use it to switch from call to put to put to call or squaring off existing positions)
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Chapter Lead at Danske IT and Support Services India Pvt Ltd
12 个月Hi Manish Ahuja as always you made it sound so simple.I just started learning about Options, and a long way to go before I actually start trading in them. But this article has lot of food for thought. Thanks for sharing. ?ubhadeep Dasgupta I am sure you will find this very interetsting ??