Beginners FAQs

The intention of this document is not to explain the HABB strategy but to explain things that
beginners frequently ask. Please ask your HABB related queries during live sessions or in the
group to get those answers. The contents are prepared keeping in mind past queries that we
got, and in no way is complete. We will keep adding more content as time progresses.
What is HABB and Vanilla HA?
HABB stands for Heiken-Ashi-Bollinger Bands method of trading. Vanilla HA is using just Heiken
Ashi candles to trade.
What Instruments/Segments We Can Trade using HABB Method?
Any instrument with price action or price movement can be traded with HABB method.
However, our system believes in high returns on low capital, thus following instruments can be
traded (that has enough liquidity)

• Indices like Nifty, BankNifty

• Stock Options – Many choices, but limit your basked of stocks that you want trade.
Discuss during live trading sessions.
• Currency Pairs – We trade only USDINR options as it is the only currency pair with
sufficient liquidity.
• Commodities – Crude and Natural Gas are the only commodities that can be traded
using options. Other commodities like Gold, Silver need to be traded with futures only.
• Crypto Currencies – No specific coin/token. Discuss during live trading sessions.
Which Broker is Best?
All brokers today charge Rs 20 or less per order (ensure its per order and not per lot) for
intraday as well as positional trades so this criterion should be the last one for choosing a
broker. As we are option buyers, and that too deep OTM options buyers, things will differ from
one trader to another. Consider following while choosing a broker.

• Day Trader – If you are someone who takes only intraday trades, Zerodha should be
good enough. You can buy deep OTMs of Nifty and Banknifty as MIS or intraday trades
only. Stock options, USDINR options, commodity options can be carried forward as
positional trades. You will have to fund commodities trading account separately in
Zerodha to trade in commodities.
• Day, BTST, and Positional Trades – If you take BTST and positional trades using deep
OTMs in Nifty and Banknifty, then Dhan, Fyers, Aastha, Finvasia, Kotak among many
others are good. There are no restrictions on buying any strike price.
A broker should be chosen on his reliability on executing trades even during the most volatile
periods, particularly if you are scalping. If you are higher time frame trader in Indices, than
anyone other than Zerodha is good enough.
Important: Whenever you sign up with a new broker, ensure the broker is charging you per
order and not per lot.
Order Related FAQs
Why I am unable to exit my position, and is getting rejected by the broker?

• Check if you have any pending orders (like target or stop loss) in your orderbook. If yes,
please cancel that order and exit your current position.
• For many instruments, like currency and commodity options, brokers do not allow
exiting at market prices. You will have to place limit price order to exit the trade.
The following video from Zerodha will explain you how to place, Stop Loss, Target on your
orders. If you have any other broker, please search of videos on YouTube.
Video - https://youtu.be/eXMrEMdQWrQ
Most brokers have stopped providing bracket orders (placing stop loss and target in the same
order), so you either can place stop loss or target at one time.
Time Frame Related Queries
Why I am unable to choose 4 Hour Time Frame in Zerodha?
Here’s how you see the 4 HR TF in Zerodha (with video) - https://bit.ly/3T6B75m
Which Time Frame is Best to Trade?
This is a subjective and open-ended question. This is something that you have to decide. There
are people in our group who trade on 3 min time frame and people who trade on daily time
frame. You will have to decide for your self which time frame suits your trading persona.
Consider the following factors.
3 Min, 5 Min, 10 Min Time Frames

• You will get multiple opportunities to trade during the day.

• You will get early entries in these time frames, but your stop loss will also get hit very
quickly if the trade is not in your favor.
• Your stop loss will be small, but so will be your target.
• You will have to get into the trade quicky and exit as quickly.
15 Mins

• Time frame recommended for intraday trading.

 • You will get 2 or 3 trade opportunities per day.
• Stop loss or exit will be very less, targets or exits will also be with good Risk-Reward
ratio.
• If the options contract has enough time for expiry, you can carry forward the trade.
• To reduce (not eliminate) false entries, follow the Daily Momentum Principle
1 HR, 4 HR, 1 Day

• Recommended only for positional trading.

• Stop loss again will be very less, rewards will be huge compared to risk taken
• Trade opportunities will be very less, but returns will be extremely good.
• If you are a positional trader, choosing options contract expiry is of critical importance.
Please discuss during live trading sessions.
How to Choose the Strike Price?
Selecting the strike price depends a lot on risk management and your trading time frame. Here
are some guidelines to choose the strike price –

• If you are an intraday trader, simply decide a premium, for eg Rs 100 for BankNifty and
trade it whether the market is in uptrend or downtrend. Stop loss will be 40 points. For
Nifty, the premium would be Rs 50 and stop loss will be 20 points. In case of USDINR,
Crude, and Natural Gas, its different ball game and can be discussed during live trading
sessions.
• For BTST players, buy strike price of Rs 50 premium with expiry of next week.
• For positional players, take into consideration factors like entry price, stop loss and
expiry week.
As a thumb rule, if you plan to hold the position for long time, that is you are a positional
trader, then the expiry of the option contract should be sufficient for the trade to perform
optimally. For intraday players, same week expiry, even on expiry day is good enough. If you
still find it difficult to choose the strike price, consider following table –

Day of the Week Strike Price

Friday +/- 1500 points away from Spot price at time
of taking the trade
Monday +/- 1000 points away from spot price at time
of taking the trade
Tuesday +/- 800 points away from spot price at time
of taking the trade
Wednesday +/- 500 points away from spot price at time
of taking the trade
Thursday (expiry day) +/- 300 (before 12:30) points away from spot
price, and ATM after 12:30
Risk Management and Position Sizing
If you have Rs 10,000 in your trading account, you are supposed to trade with only lot. Once
that 10K becomes 20K, you can make the lot size 2. This is the simplest risk and position sizing
guideline you will ever receive.
Profit Booking
The truth is, no one know how much the market will rise or fall, thus you cannot time the exits
perfectly. With that being said, here are some tried and tested methodologies to book your
profits. These guidelines are applicable for all time frames.

• You set a fixed Risk-Reward ratio for yourself, like 1:2 or 1:3 and exit when your targets
are achieved. You might miss big moves and huge profits on some days though.
• Exit when the price reaches the upper Bollinger Band. Again, the price might do band
walk and you might lose on a big move.
• Exit when the system tells you to exit, irrespective of whether you are in profit or loss.
Each of the guideline mentioned above will have its own set of pros and cons.
Some General Tips

• Trading is not a science or mathematical equation that will yield consistent results. Its an
art, a skill that has to be achieved with practice and patience. If you really wish to
succeed, practice it daily.
• You can only be provided guidelines, its your duty to practice the skill and get better at it
every day. No skill can be achieved over night. Some will learn fast, some will take time.
• Do not mix or superimpose your past learnings over HABB, disappointment will be
waiting for you with open arms.
• If you feel a particular instrument is giving entry into trade, take it, do not ask for
confirmation, the first step towards becoming an independent trader is to learn to take
decisions independently.