VolDynamics

Volatility-focused derivatives research
IV–RV dynamics | Regime shifts | Market structure
Systematic approach to index derivatives
Independent trader

[VolDynamics @VolDynamics]

I am new to this space and looking to meet people interested in what i do and discuss technicalities of the process.

I have decided to journal my trading journey and post my P&L without fail either monthly or quarterly. Started trading the account since August. I do monthly trades and below is the performance for the months of August, September and October.

August 6.18%
September 5.41%
October -2.29%
Total 9.29%

This financial year has been little tougher than the past financial year. Lets see how this year goes.

[VolDynamics @VolDynamics]

What is the ideal Risk Reward to trade the markets?

I always felt that there is no one answer to this question. It entirely depends on what kind of trading you are doing. If you are trading scalps then 1:1 with active management is wise. If you do positional a SL on mtm in terms of % works well. Trading on reversal/ continuation structures then making some qty risk free and then trailing the SL works well.

So we have to choose our risk reward based on what we do rather than blindly going for 1:2 or 1:3.
The reason why i dont feel for this is that such blind target might face some S/R from a 30min/60min TF and one cannot account for everything.

So i always refer sl based on the kind of trade i took and even before taking the trade i look where my SL is , where my profit and then analyse if the risk reward is doable and then go for entry rather than doing entry and then blindly keeping 1:3.

[VolDynamics @VolDynamics]

@sohamsankaran @PopVaxIndia Very proud to see our own R&D growing without bounds.

[VolDynamics @VolDynamics]

@KdSimplyAmple can we cook something small. we already cooked enough for this year...

[VolDynamics @VolDynamics]

@Mohitsharma202 Option 1 is over trading / no proper risk control.

Option 2 is more of an ego issue than pain.

[VolDynamics @VolDynamics]

@TheH0n3stTrader They make the markets.

[VolDynamics @VolDynamics]

@traderayushi time will tell

[VolDynamics @VolDynamics]

@TheH0n3stTrader first 2 are in our hands. But who will marry a trader 😁, 3 and 4 are not entirely in our hands.

[VolDynamics @VolDynamics]

@OmeniSteph93105 as long as it is required.

[VolDynamics @VolDynamics]

@DiscretePriti maybe flat.

[VolDynamics @VolDynamics]

@DemandorSupply we have seen multiple times right....? Nifty kisiko bhaav nahi dethi.... it does what it wants anyway.

[VolDynamics @VolDynamics]

@Xaulord1 decent

[VolDynamics @VolDynamics]

@prakasamOnX Gold ETF do offer a cut on 3% GST and give us returns equal to gold without costing us the Inventory charges. Buy what is required for the loved ones to wear and rest park in ETFs. That way we can stay out of sight from relatives as well 😁

[VolDynamics @VolDynamics]

@InvestorOfJAMMU Thank god, now we can eat silver again.

[VolDynamics @VolDynamics]

@hariniv2505 happy if it holds till diwali

[VolDynamics @VolDynamics]

@Yuvraj_77 everyone is expecting a down move so you know.

[VolDynamics @VolDynamics]

SharpE Ratio: Finance’s favourite Metric.

The Sharpe Ratio evaluates how much excess return an investment produces for each unit of risk (volatility) endured.

Sharpe = (expected return of the portfolio - risk free rate)/ standard deviation of portfolio return( volatility)

Quick Rule of Thumb:
< 1.0 : Sub-optimal / inadequate return for the volatility taken.
1.0 - 1.9 : Good / solid risk-adjusted return.
2.0 - 2.99 : Very strong / elite performance.
3.0+ : Exceptional (or heavily overfit / concealing hidden tail risk).

But it can also be misleading.
For detailed reading you can refer the below substack
https://t.co/KdifxtN6t9

[VolDynamics @VolDynamics]

@algridtrader Yes, but banks also do trading. A part of their earnings do come from equities and forex. So they mitigate risk overall by not concentrated in one asset class.

[VolDynamics @VolDynamics]

@TraderDivergent Day trading gave me control over overnight events. Swing trading gave me more time to invest into other things. My reason to get into monthly positionals is due to the current regime.