N Option Selling 2

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## 📌 Script Description

**NIFTY Weekly Option Seller – Regime-Based Risk-Controlled System**

This indicator is designed for **systematic weekly option selling on NIFTY**, using a **rule-based regime and scoring framework** to decide **what to sell, how aggressively to sell, and when to defend or harvest**.

The script does **not generate buy/sell signals**.
Instead, it acts as a **decision and risk-management engine** for option sellers.

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## 🔹 Core Idea

The market is always in one of three regimes:

1. **Iron Condor (IC)** → Range / mean-reverting market
2. **Put Credit Spread (PCS)** → Bullish trending market
3. **Call Credit Spread (CCS)** → Bearish trending market

This script **scores all three regimes (0–5)** on the current chart timeframe and automatically selects the **dominant regime**.

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## 🔹 How Scoring Works (High Level)

Each regime score is built using **price structure + volatility + momentum context**:

### PCS (Bullish bias)

* EMA alignment (8 > 13 > 34)
* ADX trend strength
* Price above VWAP
* CPR breakout
* RSI sanity checks (size is reduced in extremes)
* Daily trend confirmation

### CCS (Bearish bias)

* EMA alignment (8 < 13 < 34)
* ADX trend strength
* Price below VWAP
* CPR breakdown
* RSI sanity checks (size is reduced in extremes)
* Daily trend confirmation

### IC (Range bias)

* Low ADX (both intraday & daily)
* Price inside CPR
* Price near VWAP
* Price inside Camarilla H3–L3
* RSI near equilibrium (45–55)

A **cross-penalty system** ensures that strong trends suppress IC scores and vice-versa, preventing conflicting signals.

Scores are **smoothed** to reduce noise and avoid over-trading.

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## 🔹 Regime Selection Logic

* The regime with the **highest score** is selected.
* If scores tie:

* **Trending markets → PCS / CCS**
* **Non-trending markets → IC**

This ensures **trend takes priority over range** when volatility expands.

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## 🔹 Strike Selection (ATR-Based)

The script suggests **volatility-adjusted strike distances** using ATR:

* **Iron Condor:** ±1.0 × ATR
* **PCS / CCS:** ±1.25 × ATR

This adapts automatically to changing volatility instead of using fixed point distances.

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## 🔹 Risk-First Trade Management

The script provides **three actionable alerts only**:

### 🔴 DEFEND

Triggered when:

* Price approaches short strike
* Trend breaks beyond Camarilla levels
* Volatility expansion threatens the position

→ Signals the need to **roll, widen, or convert**

### 🟢 HARVEST

Triggered when:

* Adequate price cushion exists
* Market remains range-bound or stable

→ Signals opportunity to **book profits or roll closer**

### 🔵 REGIME CHANGE

Triggered when:

* Market structure flips decisively

→ Signals need to **switch strategy bias**

A **cooldown system** prevents alert spam.

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## 🔹 Position Sizing Philosophy

* Scores determine **directional conviction**
* RSI-based **size multiplier** automatically reduces exposure in extreme momentum conditions
* Optional **minimum lot floor** ensures participation without over-risking
* Designed to support **Risk:Reward frameworks (1:2 or 1:3)** through premium-based stop discipline

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## 🔹 Visual & UX Features

* Background color reflects active regime and conviction
* On-chart panel displays:

* Active strategy
* Scores (IC / PCS / CCS)
* ADX & RSI
* VWAP, CPR, Camarilla levels
* Clean, non-repainting levels (previous day data)

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## 🔹 Intended Use

* Weekly option selling (IC / PCS / CCS)
* Works best on **30m–1h charts**
* Designed for **rule-based traders**, not discretionary scalpers
* Focused on **capital preservation, consistency, and disciplined adjustments**

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## ⚠️ Disclaimer

This script is **not financial advice**.
It is a **decision-support and risk-management tool** for experienced option sellers who already understand spreads, adjustments, and margin dynamics.