Exit Polls have predicted victory of BJP. If this comes true there is a chance of Nifty opening gap up on Tuesday. But how much gap up? No one knows.
But in many instances exit polls have been proved wrong. So what happens if BJP looses? Nifty will open gap down on Tuesday. But how much gap down? No one knows.
This where speculators lose money.
I am sure some 50% traders will put their hard earned money on the line in the long straddle trade.
If no move comes and VIX dropped, they are set to lose money.
Keep in mind that these are the times when speculators are betting on heavily. I think per trader the money on risk will be Rs. 50,000. And average loss will be 50%. So just in a matter of days 50% of traders money will be lost.
Disclaimer: The above is a pure guess as per my experience. Unfortunately there is no data monitoring of total money made a lost in a day. Only data monitoring is about trades done not who lost and who won. So there is no way to know total money made for how many traders and total money lost for how many. Data is only open for open interest. So the above is a pure guess on what happens when traders speculate trading or take a gamble.
That does not mean we should not trade during these days. This is the reason the directional strategy is there in my course. In the event in a loss two things happen:
1. Loss is limited and minimized, and
2 .There can be a profit even if the direction the trader takes is wrong. Yes you read that right. Even if your view is wrong you can make money.
WhatsApp Testimonial on 24-Aug-2015 the day Nifty Fell by 500 points for Directional Futures Trade of my course – It was Futures Buy – The trade still made money – Results may vary for users
His view was wrong yet he made profits. How many times do you make money when you traded a future or option and went wrong on your prediction and yet made money?
My guess is not even once as how can you make money if the trade went against you? Yes it is possible. How it is possible is written in my course.
Conservative Options & Futures Trading Course – Directional and Non-Directional
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