Bank NIFTY is an index of India’s 12 most prominent and most liquid banking stocks. This index, launched in 2009, is now massively traded on the stock market, with several traders making a living solely by making predictions on Bank NIFTY. They do this by studying the bank NIFTY live chart.
Bank Nifty has several advantages and disadvantages. On the one hand, Bank NIFTY is particularly appealing to traders looking for a quick profit because of its high volatility, as price jumps are more likely with this script. This feature also makes it more attractive to intraday traders because any profit margin of more than 2-3 percent per day is considered a good day’s trade for a trader.
It is not easy to predict what will happen the next day. Professional traders never make predictions; they only react to the Bank Nifty. They look at historical patterns on the Bank Nifty chart analysis to determine the likelihood of X happening if Y happens.
This article will go over some bank Nifty option trading strategies, a few bank Nifty tips, and bank Nifty option tips to help you understand how to trade in Bank Nifty.
Table of Contents
To begin, in the charting software, create a 5-minute candle chart. The following step is to determine where you want to start your strategy. You must select a point where the first two candles are bullish or bearish.
When your first two candles appear bullish, place your buy order at the high of the second candle. When it is triggered, the stop loss order should be set at the candle’s low. If two candles are bearish, you do the opposite and place your buy order at the candle’s low, with your stop-loss order placed as a buy order at the candle’s high.
This strategy can also be used with a bracket order. In this case, your stop-loss order would be set at 40% of the height of your candle. The target is set at twice the height of the candle because we’re aiming for a 1:2 ratio.
For example, if the height of the candle is 40 points, you place the target order at 80 points. It is critical to remember that if both candles appear to be bullish, only sell orders should be placed, and conversely if the first two candles appear to be bearish.
If the market opens with a downward gap, you should wait for the chart to close that gap. When a candle closes this gap, you put in a sell order. Analysis and trend research forecast that the price will fall from here. As a result, the sell order protects you from the price drop.
This bank nifty option trading strategy is expected to be used when the market opens with a large gap up. When you notice the market opening with an upward gap, you wait for one candle to fill that gap before placing a buy order at that point.
In contrast to the “sell trade” section of such a strategy, the price is expected to rise, enabling you to get in on the action before it happens and potentially profit. Although the gap is usually filled in less than a day, another of the bank’s handy hints states that if that’s not the case, you should wait for such a gap to be filled within the coming days and then place your orders.
Bank NIFTY 50 chart is an appealing script for investors trying to make a quick profit, but its volatility warns against the risk. Although there is tons of research and theory about how to play bank nifty, these tips or strategies are simple entry points into the world of trading. There are several ways to trade these options, and with the right tips or trading strategy, you can gradually improve and make more successful trades.