Opening the Journal: Rules Before Trades

I have been reading about options for a long time and trading them for a short one. Everything I know came from the internet — YouTube channels, broker blogs, backtest threads, a few PDFs I will not admit to paying for. None of it was worthless. All of it was unverified.

That is the problem this journal exists to fix.

Why write any of this down

Screenshots lie by omission. You post the winner, you delete the loser, and six months later you have a highlight reel instead of an edge. A journal that records the trade before the outcome is known is the only honest instrument I have.

So the format is fixed from today:

• A system is written down in full before the first rupee is risked under it.
• Entry, hedge, target, exit and time-stop are stated as numbers, not intentions.
• Every trade gets a post. Winners and losers both. Especially the ones where I broke my own rule.

If a trade loses money but follows the system, it is a good trade with a bad outcome. If a trade makes money but breaks the system, it is a bad trade that got paid. I want to be able to tell those two apart later, and I will not be able to from memory.

Where the knowledge came from

Nothing here is original. Iron condors are textbook. Supertrend and a moving average are the two most common indicators on any retail chart in India. Delta-based strike selection is in every options course sold on Instagram. Combined-premium charts have been doing the rounds for years.

I am not claiming an edge in ideas. The only thing I can plausibly own is execution: whether I take the trade when the rule fires, size it the same way every time, and get out where I said I would. That is the variable this journal is actually tracking.

The systems

Everything I run is a defined-risk options structure on an Indian index. Short premium, hedged on both sides, so the worst case is a number I can look up rather than a number I discover.

Sensex weekly iron condor (mechanical)

• Deploy every Monday at 09:45, in the Sensex weekly expiry (Thursday).
• Sell the put 700 points below spot; sell the call 700 points above spot.
• Hedge both: buy the put 300 points further out from the short put, buy the call 300 points further out from the short call.
• Target and stop both come from the payoff graph at deployment. Whatever max profit the graph shows, 50% of it is the target and 50% of it is the stop. If the graph shows ₹3,000, I take profit at ₹1,500 and I cut at ₹1,500.
• Time stop: 2:00 p.m. on expiry day, no exceptions. After 2 p.m. on a Thursday, gamma stops being a Greek and starts being a weather event. I do not want to be short options into that.

Symmetric target and stop means I need to be right more than half the time, minus costs. That is the bet. Whether the Monday-to-Thursday theta on a 700-point wing actually clears that bar is exactly what this journal will find out.

BankNifty monthly iron condor (mechanical, signal off the combined premium)

The signal here does not come from BankNifty's price chart at all. It comes from the combined premium of the month's ATM straddle.

• First trading day of the month, after the close: take BankNifty's close and round it to the ATM strike.
• Plot the combined premium of that strike for the monthly expiry — ATM CE + ATM PE, added together, as a single instrument. That chart is the system.
• Every day from the second onward, at 3:15 p.m.: if the combined-premium candle closes below the previous day's close, deploy an iron condor — sell the 0.4 delta CE and PE, buy the 0.2 delta CE and PE as wings.
• Target: 50% of the max profit shown on the payoff chart at deployment.
• Exit: on any day the combined-premium candle closes above the previous day's high.
• Then repeat the daily check. If the entry condition fires again, deploy again. A month can hold several cycles.

The straddle price is what the market charges for movement. Falling combined premium means it is charging less than it did yesterday — decay winning, nobody bidding for protection. That is the weather a short condor wants. Combined premium taking out yesterday's high means the market has abruptly re-priced movement upward, and I do not need to know why. Get out.

Note what is absent: no rupee stop. The exit is a signal, not a number.

Nifty positional spread (discretionary, indicator-led)

• Chart: Nifty, 75-minute, with a 20 EMA and Supertrend.
• Long signal: the 75-min candle closes above the 20 EMA and Supertrend is green → sell the 0.4 delta put, buy the 0.2 delta put.
• Short signal: the 75-min candle closes below the 20 EMA and Supertrend turns red → the mirror image on the call side.
• Exit: the opposite signal. A close below the 20 EMA with Supertrend red closes the long; the reverse closes the short.
• Expiry selection: Nifty weeklies expire Tuesday. A signal on Wednesday, Thursday, or Friday takes the upcoming Tuesday expiry. A signal on Monday or Tuesday skips to the following week's expiry. I am not opening a fresh position into an expiry that is about to die.

This one is manual, which means it is the one I will eventually lie to myself about. Noted in advance.

Sizing, and the thing sizing does not protect against

One lot per leg. Every trade, every system. No scaling up after a win, no revenge sizing after a loss. That is the whole risk framework at the moment, and I am aware of how thin it is.

What one lot does not do is make my positions independent of one another. Every structure above is short premium. Short premium is short volatility. All of them make money when the market does approximately nothing, and they all make it for the same reason.

On a quiet week that looks like a portfolio. On a violent one it isn't. When a shock lands, my positions will not fail one at a time — they will fail together, at the same hour, for the same cause, because underneath the different strikes and instruments they are all the same bet.

I am writing that sentence down on day one specifically so that I cannot claim to be surprised by it later.

What counts as failure

Not a losing trade. Losing trades are the cost of doing business, and these structures are designed to have plenty of them.

Failure is:

• A stop that existed on paper and not in the order book.
• A signal that fired and I did not take, because I did not like the look of it.
• A position held past its exit because it was "about to come back."

Those three are the ones that end accounts. Losses just dent them.

Ground rules

1. One lot. Every time.
2. The exit goes in when the trade goes on, not when the trade goes wrong.
3. A time stop is a hard rule, not a suggestion.
4. Every trade gets written up within a day of closing, before I have had time to construct a flattering version of it.

First trades are on. Post-mortems to follow, whichever way they land.

Disclaimer

This is a personal trading journal. It is a record of my own trades, my own money and my own mistakes — nothing more.

Nothing here is a trade recommendation, a tip, a call, or advice of any kind. I am not a registered adviser and I am not qualified to tell anyone what to do with their capital. Every position described is one I took for my own reasons, and most of them are still being tested by the only thing that matters, which is time.

If you read this blog and place a trade because of it, that trade is yours. I accept no responsibility for anyone else's losses. Do your own research, size for your own risk, and understand that options can lose you more, faster, than you expect.