Bank nifty is an index that was launched in 2009 from the 12 highest cap and liquid stocks from the banking sector. Trading volume is very high in the bank nifty index nowadays. Traders who want to trade in the banking sector index don’t face any problem of low volume and volatility in this index. Smart traders have made lots of money through trading inbank nifty option tipsby making good strategies. We will discuss here in this article how to make a strategy in bank nifty options for a good profit.
As discussed earlier bank nifty is very volatile and has a large volume. Everything has advantages and disadvantages also. Trading is bank nifty options is very risk also. Your capital may be double or triple in a day and can be zero also. So a trader must not trade in bank nifty option without stop loss. Trading without stop loss in bank nifty option may very harmful and can be resulted in total capital loss. Bank nifty option is very useful for intraday traders who trade in bank nifty option with expert professional analysis. This analysis could be done by themselves or could be done by SEBI registered research analysts on their behalf. Every trader must start trading in bank nifty option after deep analysis either by themselves or getting advice from any SEBI registered research analyst.
Before starting analysis you have to mark a five-minute candle chart in your charting software. First, you have to fix your starting point from where you want to start your trade. Then you have to fix two candles for bullish and two candles for bearish. If you are bullish in the market you must place your order at the point of your second candle. if your trade gets executed you must place a stop loss at the low of the same candle. Vice versa you must do in the case of bearish trade, you must buy at the lower point of the candle and must place a stop loss at the highest point of candle or get tips with one of the best stock tips provider company in India.
A trader can also utilize this strategy through bracket order. In this case, stop loss must be fixed approximately 50% of the height of the candle and we are following a 1:2 ratio. This means the target price will be double the height of the candle. For example, if the height of the candle is 50 points our target would be 100 point . in the case of when the market opens with a gap down (Very low from the last trading session closing rate), we must have to wait till the chart fills that gap. We must place a sell order at that point. The analysis predicts that there is huge changes in the dropping of the market from this point. The market can open gap down and gap up also. In the case of if the market opens gap up (very high from last trading sessions closing rate), we must have to wait till the charts fill this gap. When the chart fills this gap we must place the buy order and must place our target and stop-loss as per the strategy already discussed.