What is a trading system?

A system is defined as a set of rules which you follow in trading. It essentially has below components:

Instrument: The instrument such as Stock, Futures or Options

Entry criterion: When are you going to take a Sell/Buy position in the instrument. It can be time based such as 0930 AM or it can be based on indicator e.g. if an instrument/stock price moves above 50 day moving average etc.

Exit Criterion: When are you going to exit the position. Exit can be based on a stop loss, a target or a particular time e.g. in intraday systems positions need to be exited before market close

Power of large numbers: All systems are based on belief that if you keep doing same thing again and again then you will make money in long term. Here back testing is of good use where once a system is formed it can be back tested to see if it is profitable in past. Though this doesn't guarantee that system will perform well in future but probability of it being profitable in future will be high. 

Strategies listed in my blog are based on Nifty and Bank Nifty options and there are different flavors of them - Monthly, Weekly & Daily.  

Now why I chose options and mainly selling strategies?

When a stock or future is bought or sold then there is 50% - 50% probability of profit/loss. However when an option is sold the win probability is 2 in 3 i.e. 67%. This is because option selling makes money if the underlying instrument increases in price or remains same in value. 

Why I am sharing my trading strategies

When I entered the market initially, I had no clue how to trade in market and lost a big amount of money while trading. Market is always skewed towards old timers/market experts as they have niche techniques and tools which a beginner is not aware of. What this causes is that these experts make money on the expense of the gullible beginners and many beginners lose their hard earned money to the market and most of them never return back. 

What if the same tools/techniques which are available to experts can be made available to beginners. The game will change where both beginner and experts will have equal footing. From my experience in market I learned that system trading is one area where even if you don't know much about market you can make money by doing same thing again and again(Power of large numbers). So if a beginner wants to start trading then this is the area which should be focused on first. 

My aim is to make beginners in market on equal terms with experts so that each has equal opportunity to earn from it. Note that trading is a zero sum game and if a person makes profit then other is making a loss. So it needs to be entered at its own risk and with surplus capital which you will not worry about even if you lose it. 

Note: I am not a SEBI registered advisor and sharing strategies for learning purpose only