Tips and Plans for Bank Nifty. Bank NIFTY is an index of the 12 banking stocks with the highest market capitalization and liquidity. Since its 2009 debut, Bank NIFTY has been heavily traded on the stock market, and many traders focus solely on it. Bank NIFTY option traders have developed many bank option trading strategies over the years. There are now a lot of tips and tutorials on how to trade in Bank NIFTY on the market.
This blog will give you a short summary of two trading strategies for Bank NIFTY options. It will also give you many tips for Bank NIFTY and Bank NIFTY options that could help you learn how to make better trades in the future.
There are both good and bad things about Bank NIFTY. On the one hand, Bank NIFTY is very appealing to traders who want to make a quick profit because the price is more likely to jump up and down. This also makes it more appealing to intraday traders, since any day’s trade that makes a profit of more than 2% to 3% is a good one. But Bank NIFTY is very risky because of the same thing that makes it unstable. Simply put, the price is likely to change, and if you can’t keep up, your chances of losing and the amount you could lose are both increased.
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Keeping this in mind, let’s look at how to trade in Bank NIFTY and Bank NIFTY options, as well as some trading tips.
Strategy #1
This strategy for trading Bank NIFTY options only works for intraday trading.
First, use your software to make a 5-minute Candle Chart. Choose the point from which you will start your plan. You have to choose a point where the first two candles are both either going up or going down. If your first two candles are bullish, you must place your buy order at the high of the second candle.
Once this happens, the stop loss order must be set at the low of the same candle. If the two candles are bearish, you place your buy order at the low of the candle and your stop-loss order as a buy order at the high of the candle.
For this strategy to work, you can also use a bracket order. Your stop-loss order is set to 40% of the height of your candle in this case. In this case, we want a ratio of 1:2, so the target is set at twice the height of the candle. If the height of the candle is 40 points, for example, you set the target order at 80 points. It’s important to remember that if both candles are green, you should only place sell orders, and if both candles are red, you should only place buy orders.
Strategy #2
a. Sell trade
If the market opens with a gap down (a jump to a lower price than the previous day’s close), you must wait for the chart to fill that gap. When a candle fills in this space, you put in an order to sell. Analysis and research on trends show that the price is likely to go down from here. So, the sell order will protect you from this price drop.
b. Buy Trade
This strategy for trading Bank NIFTY options is made for when the market opens with a gap up. When the market opens with a gap up, you wait for a candle to close the gap before placing a buy order. The price is expected to rise, unlike the “sell trade” part of this strategy. One of the Bank NIFTY tips says that if the gap isn’t filled in a day, wait a few days and place your orders.
Part of these Bank NIFTY option tips is to set your goals and stop-loss levels. To determine stop loss and targets, draw a horizontal line from the closing candle’s high. Your buy order will be filled when the market corrects to close this gap. The stop loss should be set at the low of the last candle. A second tip for trading Bank NIFTY options is to set the target at twice the height of the candle. This is similar to the first tip. For instance, if the candle is worth 50 units, you should set your goal at 100.
If the number is less than 100, you wait until the next gap. You can do this with a 15-minute time frame chart.
Conclusion
So there were some Tips and Plans for Bank Nifty. Bank NIFTY is a good option for investors who want to make money quickly. Its volatility, on the other hand, makes investments riskier. Bank NIFTY options can be traded in many different ways. With time, you can start to make more successful trades if you use the right Bank NIFTY tips and Bank NIFTY trading strategies.
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