Part 1 Master Candlestick Pattern

Risk Management for Beginners

Risk management is the most important subject in options education. Even the best strategy fails without discipline.

Rules for beginners:

Never invest all capital in options (limit to 10–20%).

Always use stop-loss orders.

Trade in liquid contracts (like Nifty, Bank Nifty, large-cap stocks).

Understand Greeks (Delta = direction, Theta = time decay, Vega = volatility).

Avoid selling naked options (unlimited risk).

Common Mistakes Beginners Make

Buying cheap out-of-the-money options – They look attractive but often expire worthless.

Ignoring time decay – Options lose value daily.

Overtrading – Too many trades cause losses.

No exit plan – Holding losing positions too long.

Chasing quick profits – Leads to gambling behavior.

Educational Tips for Success

Start with paper trading to learn without risk.

Focus on 1–2 simple strategies first (covered call, spreads).

Keep a trading journal to track mistakes.

Read about market psychology.

Remember: protecting capital is more important than chasing profits.