Nifty & Bank Nifty strategy contest thread for the week ending November 7, 2019

Hi there!

Post your Nifty/Bank Nifty trading strategy for this week below and stand a chance to win a ₹5000 Amazon voucher every week. The post will be judged on the quality of the content, ease of understanding, and engagement.

We will announce the winner on this thread on Friday evening, and create a separate topic with your post to open it up for discussion the following week.

2 Likes

My trading strategy for this week is

Bank nifty & Nifty turned in to a strong upside bias and FIIs continued to buy. Market moved quickly on upside and expecting further upside on the market after a correction so i would be both short & long on the market for this week i would initiate my trade in 2 part, on 4-11-2019, i would short the bank nifty & Nifty on rally ,for around 100 points on Nifty and 300 points on bank nifty.Target for bank nifty is 30254, 30150/30170, 29975, 29830. For Nifty 11835, 11805, 11730. Resistance for nifty is 11917 & for bank nifty 30480/30640 . This short trade is risky keeping in mind the strong up side on the market. but i will close the trade if the trade moves in to 50 points on Nifty 150 points on Bank nifty , on intra- day basis, and wait for a chance to initiate a long trade on nifty & bank nifty depending on the nature of the correction. For me 11805-11811 on nifty and 29975 on Bank nifty level is very important and i will initiate a long trade if the market hold this level. For this week trade is on both buy& sell i would prefer Options instead of Future to reduce the risk. My trade set up will be by buying Monthly ATM Option Stradles on Nifty & Bank nifty. Capital risk is around Rs 27000/- for 1 lot on last closing basis.
Please note that this trade set up just for sharing and up for discussion & for critics/is not a recommendation

Trading Set Up for Banknifty on 05/11/2019

1. SET UP to Trade Nifty Bank.

  • Trend:
  • Market is not trending anywhere, But there is mild Bies on Upside.
  • Market set up:
  • Today Bank Nifty Force set up is Not Supportive for Buying. So, Today is Bad set up to buy. You should Avoid buying.
  • Bottom Line :
  • The Trend is Not define, But last day negative move can support today Up-move and give follow up on upside>> Bad set up to Buy.

    2. Sentiments

    • Global markets:
    • Dow Jones future is Flat to Positive & Hang Seng is Flat to Positive.
    • What is on News/TV
    • FII selling is bit disappointing. Market need to take a step back to move ahead. Banknifty showiing some futigue at 30500.
    • Positive News-flow::
    • In domestic economny, Consumption is hitting the roof as per RBI circuler. Rakesh Junjunwala buys .5% in yes bank which can prompt confidance.
    • Negative News-flow::
    • Bottom Line:
    • Sentiments is Mild Positive. Sentiments are not supportive of on going Trend.

    3. Game Theory ( Tug of war between Buyer & Seller)

    • From where New Buying comes?
    • A.Since sentiments are Mild Positive, the Outside Trader will Buy with very Mild Force. B. Trader's with a short Position-"less" chance for short covering today.
    • From where new selling come?
    • A.Since Sentiments are Mild Positive, Outside Trader may Go short on Rise Only.
    • Will there be support from buyers buys on dips?:
    • On Fall- Since the Trend is 'Not Define', There will be a moderate number of Buyers at the lower end which propels the Market to go up from Dips. Moreover at Dips Sellers who wanted to sell has sold off. So buying on dips is the Dominant Strategy as More Buyer and lack of Seller at the bottom of This Non-Trending Trend

    4. what I am going to do today (In bank nifty)

    • Set Up:
    • Today Bank Nifty Force set up is Not Supportive for Buying. So, Today is Bad set up to buy. You should Avoid buying.
    • Sentiments:
    • SentIments is Mild Positive.
    • Trading Edge:
    • My Today Trading edge points clubbing Setup & Sentiments is 51 Point. Today, I 'don't have Any Edge', So I will ' Not Trade Today'. **You can deployed staddle or strangle sell for day as it going to be ranging day**
    • Entry on Edge:
    • Buy- When BN is Between 30192-30099
    • Exit on Fair price:
    • Fair Price for Today's Trade is at least 30482.1
    • Stoploss:
    • One you get a entry, You should follow 70/100 point stoploss, without fail.
      It's Significant intellectual property & New way to Analyse the Market which use Unconventional Instruments Like Behaviour Finance & Game Theory for getting clear & Unbies idea for Traders.

    Abhikumar Patel
    Twitter
    Abhikumar9392@gmail.com

    1 Like

    I have been using (and improvising) this Bank Nifty option selling setup for at least 2 years now.

    Assumptions/facts -

    1. SPOT is the only holy grail
    2. Indicators are just indicators, I don’t use them
    3. Open Interest shows where the actual money is being deployed/ taken out from the market
    4. The ‘big guys’ have more information than us, hence we have to follow them
    5. BankNifty is more volatile than Nifty. And multiples of 20 are far easier than multiples of 75, isn’t it? What is 13 X 20 and 13 X 75 :stuck_out_tongue: Hence BN
    6. Most of the option buyers lose money and hence selling options has an edge

    If you agree on these points, please read on.

    A statisticsal deep-dive:

    I tried building this table using previous 19 years BN SPOT data. BN was trading around 10k if I remember it right and today approx 30300 today. I have normalized this data

    … and this is what I got

    How to study this image – The row labels represent ‘n’ days from a particular day and column labels represent deviation in points.

    Let us take DAY 1 on rows and 0 points on the columns. The value is 24.5%. It means – chances that BankNifty will move from 0 to 100 points from current spot in 1 day is 24.5%.

    If you need a larger range, simply add up the % values.

    1. Each column will add up to 100%
    2. It can be observed that the bottom half of the table has more greens than the upper half, indicating that the index moved up and up in the longer run (over the past 20 years) :slight_smile:

    How is this table useful –

    Let us assume we are on Friday closing, and the BankNifty Spot value is 30000.

    We have 4 days till expiry (weekly expiry). Considering the range to be (-800,800) from current spot (highlighted in red box), the values add up to 96.1%

    So we can sell (30000 + 800) CE and (30000 – 800) PE, because these options will more likely (96.1%) expire as OTM options

    If you are risk averse writer, you can choose to write options 1000 or 1200 points away (approx. 99.2%), but your ROI will be lower

    Note-
    On event days, better not to trade. Yes, you are in that 3.9% range and more likely to lose money. Sometimes NO TRADE is A GOOD TRADE. If it is itchy and you badly want to trade, you shd hedge your positions

    All the Best,
    Raghu
    niftybanknifty.com

    5 Likes

    My easy to trade 200 SMA/EMA crossover strategy.
    Today 200SMA crossed upward at 30364 & made high of 30519.
    Today 200SMA crossed downward at 30382 & made low of 30155.

    This is very simple method. Trading only by watching 200SMA/EMA crossover !

    support level is BANGON!!
    Resistance level has just 30 point miss…

    For a follow up , after a 3 trading session of the week , it seems to be, Market is in a kind of distribution , FIIs are buying While DIIs are selling ,It seems Market is not in a hurry to move above all time high level. I think market drop further down , support for Nifty being at 11875 , while Nifty closed at its Resistance turned support. at 11917, For bank nifty support being at 30129. ATM Option straddles not yet turned in to positive, but Weekly expiry being very near , its better continue to hold the Straddles.

    Trading Set Up for Banknifty on 06/11/2019

    1. SET UP to Trade Nifty Bank.

  • Trend:
  • Market is not trending anywhere.But there is Mild bies on downside.
  • Market set up:
  • Today Bank Nifty Force set up is Not Supportive for Selling. So, Today is Bad set up to Sell. You should Avoid Selling.
  • Bottom Line :
  • The Trend is Not define, But Last day Positive move can support today's down-move & give follow up on downside >> Bad set up to Sell.

    2. Sentiments

    • Global markets:
    • Dow Jones future is Flat to Negative & Hang Seng is Flat to Negative.
    • What is on News/TV
    • comming earning result could be bad. The only way to trade is to Buy on dips only. BN could give big move anywhere above 30500/30600
    • Positive News-flow::
    • Most results has come very good since last day. FM may push on real estate which can be positive.
    • Negative News-flow::
    • Titan result can be overhang. Foreign mutual fund can be treated as foreign company.
    • Bottom Line:
    • Sentiments is very Much Negative. Sentiments are not supportive of on going Trend.

    3. Game Theory ( Tug of war between Buyer & Seller)

    • From where New Buying comes?
    • A. Since Sentiments are Very Much Negative, the Outside Trader will postpone their Buying.
    • From where new selling come?
    • A. Since Sentiments are very much Negative, Aggressive short Selling expected from outside Trade. B. Trader's with Long Position- "Less" chance for Long unwind today.
    • Will there be Resistance from Seller sell on rise?
    • On rise-Since trend is not perfect!, There will be a higher number of Sellers at higher end which propels the market to go down on the intraday rise. Moreover, on Rise, a Buyer who wanted to buy has already bought. So Selling on the rise is a Dominant Strategy as more Seller & lack of Buyer on rise of this Downtrend Trending market

    4. what I am going to do today (In bank nifty)

    • Set Up:
    • Today Bank Nifty Force set up is Not Supportive for Selling. So, Today is Bad set up to Sell. You should Avoid Selling.
    • Sentiments:
    • Sentiments is very Much Negative.
    • Trading Edge:
    • My Today Trading edge points clubbing Setup & Sentiments is -64 Point. Today, I 'don't have Any Edge', So I will ' Not Trade Today'. Or I will try to enter only at 30325 around.
    • Entry on Edge:
    • Sell- When BN is Between 30325-30418
    • Exit on Fair price:
    • Fair Price for Today's Trade is at least 30034.85
    • Stoploss:
    • One you get a entry, You should follow 70/100 point stoploss, without fail.
      It's Significant intellectual property & New way to Analyse the Market which use Unconventional Instruments Like Behaviour Finance & Game Theory for getting clear & Unbies idea for Traders.

    Abhikumar Patel
    Twitter https://twitter.com/abhi_9392
    Abhikumar9392@gmail.com

    My simple strategy of 200SMA/EMA crossover !
    Today crossed 200SMA upwards at 30310 & high made 30689 ! :smiling_face_with_three_hearts:

    2 Likes

    maharajji… in which time frame

    5 or 10 minutes.
    Additionally you may use ADX (default setting).

    Trading Set Up for Banknifty on 07/11/2019

    1. SET UP to Trade Nifty Bank.

  • Trend:
  • Market is not trending anywhere, But there is mild Bies on Upside.
  • Market set up:
  • Today Bank Nifty Force set up is Not Supportive for Buying on rise. you have to look for dips to buy.
  • Bottom Line :
  • The Trend is Not define, But last day negative move can support today Up-move and give follow up on upside.

    2. Sentiments

    • Global markets:
    • Dow Jones future is Flat to Negative & Hang Seng is Flat to Negative.
    • What is on News/TV
    • This really is not healthy. But Buy on Dips is best way to play.
    • Positive News-flow::
    • Much awaited Reality fund will come for real estate sector. Positive for PSU bank,Reality & Housing finance compnay. Good number for Voltas & Mannapuram.
    • Negative News-flow::
    • Minor trade war worry for us-china.
    • Bottom Line:
    • Sentiments is Mild Positive. Sentiments are supportive of on going Trend.

    3. Game Theory ( Tug of war between Buyer & Seller)

    • From where New Buying comes?
    • A.Since sentiments are Mild Positive, the Outside Trader will Buy with very Mild Force. B. Trader's with short Position- "No chance" for short covering today.
    • From where new selling come?
    • A.Since Sentiments are Mild Positive, Outside Trader may Go short on Rise Only.
    • Will there be support from buyers buys on dips?:
    • On Fall- Since the Trend is 'Not Define', There will be a moderate number of Buyers at the lower end which propels the Market to go up from Dips. Moreover at Dips Sellers who wanted to sell has sold off. So buying on dips is the Dominant Strategy as More Buyer and lack of Seller at the bottom of This Non-Trending Trend

    4. What I am going to do Today (In Bank Nifty)

    • Set Up:
    • Today Bank Nifty Force set up is Not Supportive for Buying. So, Today is Bad set up to buy. You should Avoid buying.
    • Sentiments:
    • SentIments is Mild Positive.
    • Trading Edge:
    • My Today Trading edge points clubbing Setup & Sentiments is 41 Point. Today,I will like to trade as per My Entry Level as per below.
    • Entry on Edge:
    • Buy- When BN is Between 30438-30345
    • Exit on Fair price:
    • Fair Price for Today's Trade is at least 30729.6
    • Stoploss:
    • One you get a entry, You should follow 70/100 point stoploss, without fail.
      It's Significant intellectual property & New way to Analyse the Market which use Unconventional Instruments Like Behaviour Finance & Game Theory for getting clear & Unbies idea for Traders.

    Abhikumar Patel
    Twitter
    Abhikumar9392@gmail.com

    Decoding one more secret !
    On expiry day, BANKNIFTY moves +/- 200-400 after 1.0 p.m.
    Trade in Future or for safer side convert it in Options to trade.
    Note today’s Future price at 1.0 p.m. (backtest it).
    (THIS STRATEGY IS SOLELY ON MY PERSONAL EXPERIENCE.)

    1 Like

    Trading Set Up for Banknifty on 08/11/2019

    1. SET UP to Trade Nifty Bank.

  • Trend:
  • Market is not trending anywhere, But there is mild Bies on Upside.
  • Market set up:
  • Today Bank Nifty Force set up is Not Supportive for Buying. So, Today is Bad set up to buy. You should only buy on DIps.
  • Bottom Line :
  • The Trend is Not define, But last day negative move( Open to close) can support today Up-move and give follow up on upside.

    2. Sentiments

    • Global markets:
    • Dow Jones future is Negative & Hang Seng is Negative.
    • What is on News/TV
    • Any dips is Opportunity to take freash entry. Moody's data is laggaed data. India is outperfom due to reforms. ICICI will see Sell on news. Second half may good.
    • Positive News-flow::
    • Global backdrop is very positive & Domestic reforms is continue. FII buying is still continue.
    • Negative News-flow::
    • Moddy's nagative report may dampen the mood.
    • Bottom Line:
    • Sentiments is Mild Negative. Sentiments are not supportive of on going Trend.

    3. Game Theory ( Tug of war between Buyer & Seller)

    • From where New Buying comes?
    • A. Since Sentiments are mild Negative, the Outside Trader will Buy on DIPS only. B. Trader's with a short Position-"less" chance for short covering today.
    • From where new selling come?
    • A. Since Sentiments are mild Negative, Mild new short selling expected from outside Traders.
    • Will there be support from buyers buys on dips?:
    • On Fall- Since the Trend is 'Not Define', There will be a moderate number of Buyers at the lower end which propels the Market to go up from Dips. Moreover at Dips Sellers who wanted to sell has sold off. So buying on dips is the Dominant Strategy as More Buyer and lack of Seller at the bottom of This Non-Trending Trend

    4. What I am going to do Today (In Bank Nifty)

    • Set Up:
    • Today Bank Nifty Force set up is Not Supportive for Buying. So, Today is Bad set up to buy. You should only trade as per Entry levels. or you should avoid.
    • Sentiments:
    • Sentiments is Mild Negative.
    • Trading Edge:
    • My Today Trading edge points clubbing Setup & Sentiments is 35 Point. Today, I trade as per entry level only.
    • Entry on Edge:
    • Buy- When BN is Between 30370-30277
    • Exit on Fair price:
    • Fair Price for Today's Trade is at least 30660.15
    • Stoploss:
    • One you get a entry, You should follow 70/100 point stoploss, without fail.
      It's Significant intellectual property & New way to Analyse the Market which use Unconventional Instruments Like Behaviour Finance & Game Theory for getting clear & Unbies idea for Traders.

    Abhikumar Patel

    1 Like

    Today 200SMA was below at open.
    Crossed upward at 30550 & high made 30779 (profit 229 points) !

    Very simple to trade. Keep watch on 200SMA & that’s all !

    1 Like

    @Maharaj - Could you elaborate more on 200SMA/EMA crossover. Does it mean using 200SMA & 200EMA alone.

    Yes. You may use any supporting tool like ADX or W%R or OBV.
    No trade if no crossover on any day.

    1 Like

    Do we put any SL?
    it may lead to unlimited losses in case of unexpected bad/good news ; eg- 20th sept 2019 when BN Moved 2000 points in a day?

    How do you handle this?

    I generally don’t trade on such days.

    If u are in, may be you can set a SL at 3x of the combined premium. Works well most of the times. Else take a SL hit and book losses.

    I have all bank Stocks (CNC) in my portfolio, in same quantity as their weightage in Nifty Bank. Every Thursday evening I sell Nifty Bank (next week expiry ) ATM call option (now 30700) which premium generally values about 350.
    Rough Calculation;- Total money required in selling 1 ATM lot=765000
    {Scrips (CNC) equal one lot need money = 30700X20=615000 + Margin required=150000}
    SO I earn 350*20=7k every week/lot. which is almost 1% of my investment.
    Scrips in Nifty Bank (HDFC Bank, ICICI, Kotak, Axis, SBI) are the most stable and strong equities, so there are least chance to loose their value over the time atlest for next 10-15 Years.
    Thus I make no significance loss in week. No need for huge margin blockage on month’s end moreover I’m not forced for physical delivery of the scrips.

    1 Like