Can I Earn Assured Rs 20000-25000 per Day via Stock Market Option Trading?

Yes, it is possible to earn a substantial amount of money from the stock market by engaging in option trading. This article delves into a detailed strategy that can help you achieve a daily income of Rs 20000-25000 with minimal risk. With strategic planning and a disciplined approach, you can make your stock market investments more profitable.

Understanding the Strategy

The strategy outlined below aims to minimize risk and maximize profits in a short period. It involves a series of technical indicators and market observations that can help you make well-informed trading decisions.

Opening a Trading Account

To begin with, open a trading account with a brokerage platform that offers bullet trading services, such as ICICI. Bullet trading allows you to trade without incurring brokerage costs if you close the trade within a specified timeframe. This significantly reduces your initial cost and increases your potential earnings.

Key Technical Indicators

The strategy employs the following technical indicators:

Rapid Indicator (RSI): Identifies overbought and oversold conditions in the market. Volume Weighted Average Price (VWAP): Indicates the average price of a security over a defined period. Supertrend Indicator: Helps determine the potential direction of price movement. 20 Moving Average (20 WMA): Tracks the recent trend of the market. 36-Period Exponential Moving Average (36 EMA): Provides a longer-term moving average for trend analysis. Open Interest (OI) Pulse: Reflects the level of market interest and volatility. NIFTY or BANKNIFTY Options: These are key indices for Indian stock market trading.

Trading Strategy

The strategy is divided into three scenarios based on the Open Interest (OI) levels:

Bullish OI Scenario: Trade at the key support levels of RSI. Enter trade when the price touches the Supertrend and VWAP. Bearish OI Scenario: Trade at key resistance levels of RSI. Enter trade when the price touches Supertrend and VWAP from the downside. Consider the 36 EMA for trend analysis. Range Scenario: Trade at price support and resistance levels with the help of RSI. Combine RSI with VWAP for a more accurate trade entry.

Additionally, monitor the open interest pulse on the NIFTY and BANKNIFTY spot charts. Pay attention to in-the-money options, as these often see significant movement when trends change.

Trade Execution

For each trade, use a quantity of 500 units. Set your stop-loss and profit targets at 10 points each. This ensures that you limit your potential losses and lock in gains quickly.

Discipline and Persistence

Remember, there will be days when the market does not favor your trades or when you may experience losses. Maintaining strict discipline is crucial. If you lose on two consecutive trades, it's time to stop and reassess your strategy.

Conclusion

Trading the stock market with option trading requires a keen understanding of technical indicators and market dynamics. By adhering to a systematic approach and staying disciplined, you can optimize your potential earnings and minimize risks. Whether you choose to engage in 15-minute NIFTY spot charts or 3-minute NIFTY futures charts, staying informed and monitoring the market continuously is key to success.