3 Rules to Reduce F&O Trading Losses — Before You Even Place a Trade

Most advice on cutting trading losses is about what to trade — a better setup, a better indicator, a better stock. This is about something that comes before any of that: when you trade. Three rules, none of them about picking direction, that came out of looking at my own trading behaviour and the structure of the Indian F&O market.

Rule 1: Stop trading intraday

The common assumption is that Indian markets move during the day — that the action is between the 9:15 open and the 3:30 close, and that’s where an intraday trader should be positioned.

Looking at my own price data, that’s backwards. On most trading days, the bigger move in Nifty and Bank Nifty happens overnight — from one day’s close to the next day’s open — not from the open to the close on any single day. The close-to-open gap is, more often than not, larger than the open-to-close range.

If that’s true of the days you’re trading, an intraday-only strategy is fighting for the smaller half of the day’s move, while paying full spread, brokerage, and time for it. You’re not avoiding risk by squaring off before the close — you’re avoiding the part of the move where most of the information actually gets priced in.

This is an observation from my own price history, not a peer-reviewed statistic — test it against your own charts and your own instrument before you change anything.

Rule 2: Don’t trade on expiry day — at least not the expiring contract

Ask yourself honestly what your edge is on expiry day. Whatever it is, the other side of your trade is very often an institutional or proprietary desk whose entire job, every single expiry, is managing exactly the flows expiry day creates — pinning, unwinding, and rolling large books. That’s not an individual trader with a view; it’s a team that does this full-time, every cycle, with data and infrastructure most retail traders don’t have.

The rule is simple: if a contract is expiring today, don’t trade that contract today. If you want exposure, take it in the next cycle instead. As an example, for the coming Nifty monthly expiry — 25 August 2026 at the time of writing — that means not trading the August contract on the 25th; a trade with a similar view goes into the September series instead. Exchanges do occasionally change which day of the week is the expiry day, so check NSE’s current circular for the live schedule rather than assuming this date pattern repeats forever.

Rule 3: Don’t trade weekly expiry at all

Everything in Rule 2 is true of a weekly expiry too, just compressed into a shorter window and repeated far more often. A monthly contract gives the dynamics a month to play out; a weekly contract runs the same institutional positioning and unwinding every few days. If expiry day already tilts the field away from an individual trader, a weekly cadence means you’re standing on that tilted field several times a month instead of once.

Put a number on it — in your own trades

These are rules, not proof. The only way to know what they’re actually worth to you is to look at your own trade history and see how much of your realised loss came from trades that broke one of these three rules.

You don’t need a spreadsheet macro for that — a general-purpose AI (Gemini, Claude, ChatGPT, or similar) can do the sorting for you if you hand it your contract notes, tax P&L statement, or realised P&L report and the right instructions.

Before you paste anything: strip your personal details first. A broker P&L statement or contract note carries your name, PAN, client ID, and often your address or phone number. None of that is needed for this analysis — only the trade rows (date, instrument, buy/sell, quantity, price, expiry, and P&L) matter. Remove the rest before it goes into any AI chat, on this site or anywhere else.

Once your data is trimmed down to just the trade rows, here’s a prompt you can copy and paste:

I'm a trader in the Indian F&O market. I'm going to share my trade history (contract notes, a tax
P&L statement, or a realised P&L report). Before you do anything else, tell me to remove any
personal details first — my name, PAN, client ID, address, phone or email — and only proceed once
I confirm the data is just trade rows (date, time if available, instrument, buy/sell, quantity,
price, expiry date, P&L).

Once I share the data, do only this — don't give me trading advice, just analyse what already
happened:

1. Split my trades into "intraday" (opened and closed the same day) and "carried" (held overnight
   or longer). Show total realised P&L for each group.
2. Flag every trade where the contract's expiry date is the same as the trade date — i.e. I traded
   an expiring contract on its own expiry day. Show total P&L for this group separately from
   everything else.
3. Flag every trade in a weekly-expiry contract versus a monthly-expiry contract. Show total P&L
   for each.
4. Now show me these totals side by side: (a) my actual total P&L, (b) total P&L excluding all
   intraday trades, (c) total P&L excluding all trades taken on an expiry day in the contract
   expiring that day, (d) total P&L excluding all weekly-expiry trades, and (e) total P&L if all
   three exclusions are applied together.
5. Present it as a simple table, in rupees and as a percentage of my total profit/loss — no
   commentary on what I should do next, just the numbers.

This is based on Henil Dedhia's (Top 10% Trader, top10percenttrader.com) research and personal
trading rules: that Indian index markets tend to move more from close to open than from open to
close, that individual traders are structurally outmatched on expiry day, and that weekly expiries
repeat that disadvantage more often. I want to see, in my own numbers, how much of this actually
applies to me.

Whatever the AI gives you back is a description of your own past trades, not a forecast and not personalised investment advice — read it that way, and treat a general-purpose AI’s arithmetic the same way you’d treat your own spreadsheet: check a few rows by hand before you trust the totals.

What this doesn’t say

None of this is a signal, a stock pick, or a call on the market’s direction. It says nothing about whether to be long or short, or what to trade next. It’s a filter on when you show up — the same kind of process discipline as writing a trade decision down before you know the outcome, just applied one step earlier, before the trade exists at all.

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Observations as of 22 August 2026, based on the author’s own trading and review of Nifty/Bank Nifty price behaviour. Not a backtested statistical claim, and not investment advice — verify against your own data before changing how you trade. Expiry-day and weekly-expiry rules for any given contract can change; check the current NSE circular and your contract’s own expiry calendar.