Let us look at some Bank Nifty trading techniques and how to trade in bank Nifty weekly options. Let us also look at the best bank nifty trading strategy in the current market.
Unlike the normal Bank Nifty options that mature on the last Thursday of every month, the Bank Nifty options have a weekly maturity. Of course, they have a similar lot size for trading consisting of 40 units per lot and the weekly options will mature on the last Thursday of every week. At any point of time, there will 7 weekly options that will be open for trading.
Here is how traders can benefit from the use of Weekly Bank Nifty options. Weekly bank nifty options can be used as a better hedge against short term even risk. Let us understand this point. For example, if there is a Fed meet on Tuesday where the Fed is expected to announce a tapering of its bond buying policy. In that case, the weekly options expiring in that week will react a lot more compared to the monthly option as the context is more immediate.
Thus, these weekly bank nifty options give the opportunity to hedge risk in a more immediate perspective. For a very long time, the trading and volumes were concentrated largely on the Nifty alone. This weekly option will give an opportunity to expand the gamut to Bank Nifty options too. That will be an additional hedging tool. Not Now Allow. Please register to continue. Sign up with Facebook. Sign up with Google. Sign up with Email. Already have an account? Sign in here.
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Don't have an account? Sign up here. Enter your email address and we'll send you a link to reset your password. Reset Password Checking. This webinar will focus on short-term trading strategy in Bank nifty where the holding period will be days and this rule base system will harp on small losses and potentially bigger profits. Rules will be laid out to generate trading edges. The participants will be shown how to catch a trend with filters and the objective of the webinar is an edge if followed with discipline with lead to successful trading in the long run.
Chetan Panchamia has the experience of being 17 years in the markets starting from front office to fundamentals research before moving to the technical side and specializing in options trading and is presently a full-time Professional trader focusing on index options. He has written various articles for Moneycontrol. Xavier's College. Data analyzing can be the greatest asset of any trader or investor which is an art as well as a science which can be developed through right training. To know about the StockEdgeClub Offering click on www. Step 1 : Click on 'Reserve Spot Today! Step 3 : Click on the same link to join 15 minutes before the start of the webinar.
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Trade triggers can be based on a number of conditions, from indicator values to the crossing of a price threshold. Note how the trigger specifies the order type that will be used to execute the trade. Because the order type determines how the trade is executed and therefore filled , it is important to understand the proper use of each order type; the order type should be part of your trading plan.
Review the Order Types section of this tutorial, or see Introduction to Order Types for more in-depth coverage. Trade exits are a critical aspect of a trading plan since they ultimately define the success of a trade. As such, your exit rules require the same amount of research and testing as your entry rules. Exit rules define a variety of trade outcomes and can include:. As with trade entry rules, the type of exit orders that you use should be clearly stated in your trading plan. For example:. Note: If you set this up as an bracket order OCO order , once one order gets filled either the profit target or the stop loss , the other order will automatically be canceled.
If you place the orders manually, remember to cancel the remaining one to avoid an unwanted position. Keep in mind, writing down your trading plan is only the first step in a lengthy process. A trade order is an instruction that is sent to a broker to enter or exit a position. If you trade just using the buy and sell buttons, you can sustain losses from slippage and from trading without a protective stop loss order. Slippage is the difference between the price you expected and the price at which a trade is actually filled and can be considerable and costly in fast-moving or thinly traded markets.
Certain order types allow traders to specify exact prices for trades, thereby minimizing the risks associated with slippage. A stop loss order automatically closes out a losing trade at a pre-determined price level.
Nifty positional trading system
A protective stop loss order can be placed in the market as soon as a trade is entered. A long trade, or long position, is entered if you expect to profit from rising prices. A short trade, or a short position, is entered with the expectation of profiting from a falling market. Using a margin account, you can enter a short position by borrowing a stock, futures contract or other instruments from a broker and then selling them.
Once price reaches the target level, you buy back the shares or contracts , or buy to cover and replace what was originally borrowed from the broker. Losses from short positions are considered unlimited because the price could theoretically continue rising indefinitely. Market Orders A market order is the most basic type of trade order. It instructs the broker to buy or sell at the best price that is currently available. Typically, this type of order will be executed immediately. The primary advantage to using a market order is that you are guaranteed to get the trade filled.
If you absolutely need to get in or out of a trade, a market order is the most reliable order type. The downside, however, is that market orders do not guarantee price, and they do not allow any precision in order entry and can lead to costly slippage. Using market orders only in markets with good liquidity can help limit losses from slippage. Limit Orders A limit order is an order to buy or sell at a specified price or better. A buy limit order a limit order to buy can only be executed at the specified limit price or lower. Conversely, a sell limit order a limit order to sell will be executed at the specified limit price or higher.
While a limit orders prevents negative slippage, it does not guarantee a fill. A limit order will only be filled if price reaches the specified limit price, and a trading opportunity could be missed if price moves away from the limit price before it can be filled. Note: the market can move to the limit price and the order still may not get filled if there are not enough buyers or sellers at that particular price level.
The placement of stop orders differs from that of limit orders: a buy stop order is placed above the market, and a sell stop order is placed below the market. Once the stop level has been reached, the order is automatically converted to a market or limit order and, in this sense, a stop order acts as a trigger for the market or limit order.