Bank Nifty Options Tips and Strategy
Bank Nifty Options Tips and Strategy
When it comes to volatile markets, Bank Nifty Trading is the most extreme. Sometimes when the Reserve Bank of India announces some policy, it can immediately jump from 50 points to 100 points, but it can also crash. There is no shortage of Bank Nifty Tips and strategy providers, but most of them lack the knowledge and experience to operate in a highly volatile market. We at Gill Broking have over a decade of experience in Bank Nifty Options. Thanks to our experienced specialists and consultants, we succeed in this tough competition. We understand very well the economic and financial market pulse related to Indian banks.
Bank NIFTY has several advantages and disadvantages
On the other hand, due to its high volatility, Bank NIFTY is exceptionally attractive for traders who want to make quick profits, as prices are more likely. This feature also makes it more attractive for intraday traders, as any profit margin above 2-3% per day is a good day trade. But it is this volatility that makes Bank NIFTY very risky. Simply put, the price is likely to fluctuate, and if you can’t keep up, the potential for loss increases, as does the amount of damage you can receive.
With this in mind, let’s see how to trade Bank NIFTY and Bank NIFTY options and some trading strategies and tips.
1. Strategy #1
This bank NIFTY options strategy is for intraday trading only.
First, draw a 5-minute candlestick chart in your charting software. Choose the point where you will start your strategy. You must choose a point where the first two candles are either bullish or bearish. If your first two candles are bullish, you should place a buy order at the high of the second candle.
When this is triggered, the stop loss order must be placed at the lowest level of the same candle. Alternatively, if the two candles are bearish, you do the exact opposite and place a buy order at the bottom of the candle and a stop-loss buys order at the high of the candle.
You can also use parentheses to implement this strategy. In this circumstance, your stop-loss order is 0% of the height of the candle. Here we are chasing a ratio of 1:2 and therefore the target is set at the height of the double candle. For example, if the candle height is 0 pips, you set the target order to be 80 pips. It is important to note that if both candles are bullish, you should only focus on placing sell orders and vice versa if it is a bullish candle.
2. Strategy #2
This strategy is divided into two parts: sell trades and buy trades:
a. Sell trade
If the market opens below a gap (a jump to a lower price than the previous day’s close), you should wait for the chart to fill the gap. When the candle fills this gap, you place a sell order at that point. Analytical and trend studies predict that the price is likely to decline from this point. Therefore, a sell order protects you against this price drop.
b. Long Trade
This bank NIFTY options trading strategy is created when the market opens a gap. When you see the market open in a gap, you again wait for the candle to fill the gap and place a buy order at that point. Unlike the “sell trade” part of this strategy, the price is expected to rise, allowing you to potentially make a profit. While the gap is usually filled within a day, another Bank NIFTY tip says that if it isn’t, just wait for the gap to fill in the next few days and place the order after that.
Target setting and stop loss are an important step in these Bank NIFTY options tips. You can measure where to place your stop loss and targets by drawing a horizontal line from the height of the closing candle. This is also where you place your buy order and if the market corrects the gap, your buy order is filled. A stop loss should be placed below the closing candle. Similar to the previous Bank NIFTY options trading strategy, another tip is to set the target at double the height of the candle. For example, if the candle is 50 units, the target should be 100.
If it is below 100, then you are waiting for the next gap. For that, you can use the 15-minute time frame chart.
Bank NIFTY is an attractive ticket for investors who want to make quick profits. However, its volatility makes investments riskier. Bank NIFTY options have many ways to trade. By utilizing the accurate Bank NIFTY tips and Bank NIFTY trading strategies, you can gradually commence making more successful trades.
Trade easy and hassle free in Bank Nifty options with Gill Broking.