Hello Friends!

1 SD formula is giving success in weekly forecast, from last 119 weeks. Below levels is the weekly level for Nifty future and bank nifty future for 135th week (i.e. 21st to 24th November 2016).

What is 1SD formula?

$Price\; Range=\frac{\mathrm{(Price\; *\; volatility\; *\; square\; root\; of\; day)}}{\mathrm{divide\; by\; Square\; root\; of\; 365}}$

Nifty future of ber 2016 expiry last recorded trade is 8070, we are going to find the weekly trend hence days will be 7 calendar days(including Saturday+Sunday).

Trend expectation as per 1SD method

UPTREND conformation 8107.45, Successful cross-over above 8168.07 will target rise till 8210.92-8266.15-8326.77.

DOWNTREND conformation 8032.55, Successful fall below 7971.93 will trigger fall till 7929.08-7873.85-7813.23

RANGE-BOUND trend identification: If all up move invites sale above 8168.07 and all down move invites short covering at 7971.93 level this indication is sufficient to conclude that the price action is in the range of 8168.07 to 7971.93

What trade decision one trader should take?

• Buying above 8107.45
• STOP-LOSS 8032.55,
• HEDGE by buying put option of strike below 8032.55, for initial target 8168.07

• Selling future below 8032.55
• STOP-LOSS 8107.45,
• HEDGE buy buying call option of strike above 8107.45, for initial target 7971.93 is advisable.

Note:These levels are weekly levels hence hedge the position with option for better money management. For intraday, better use our 1SD paid software.

How to trade this week Nifty future levels?

On Monday or any time during the week if nifty 8107.45 cross then you buy the nifty future with 8032.55 put option long. If it achieves the 1st target 8168.07 during the day or any point during the week revise your stop loss to 8130.62 and hold the trade. If the 2nd target 8194.73 achieved, revise the stop loss to 8149.35 and hold the trade. If the 3rd target 8210.92 achieved, then trail or revise the stop loss to 8194.73. Continue this till last target is not achieved or trailing stop loss is not triggered. If trailing stop loss trigger, then close the hedging option position also.

After you initiate the buy trade
If the trend changes and stop loss 8032.55 hits then close the option trade, future long trade and enter the fresh trade in nifty future short and 8032.55 call long.

If your trade is with the option hedge and future has reached the stop loss, then do not quit the trade in hurry better wait for conclusive price crossover of 0.382 retracement or for the closing session 3:15 to 3:30 then decide.

You can also implement any other option strategy by the way of writing the options to protect the future trade.

Get our complete option course to learn options.

Note:I am using the call long simple option strategy to demonstrate hedging principle in trade. However, you can write the option also and do any complex strategy to protect the trade.