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Hello Friends!

1 SD formula is giving success in weekly forecast, from last 90 weeks. Below levels is the weekly level for NIFTY future and bank nifty future for 100th week (i.e. 15th to 19th May 2017).

What is 1SD formula?

Price Range= (Price * volatility * square root of day) divide by Square root of 365


Nifty future of May 2017 expiry last recorded trade is 22684.15, we are going to find the weekly trend hence days will be 7 calendar days(including Saturday+Sunday).

NIFTY Future trend for 15th to 19th May 2017

1 SD Price Range299.5
NIFTY22684.15
Up TrendDown Trend
0.23670.6822754.8322613.47
0.382114.4122798.5622569.74
0.5149.7522833.922534.4
0.618185.0922869.2422499.06
0.786235.4122919.5622448.74
0.888265.9622950.1122418.19
1.236370.1823054.3322313.97
1.618484.5923168.7422199.56
Trend expectation as per 1SD method
:

UPTREND conformation 22754.83, Successful cross-over above 22869.24 will target rise till 22950.11-23054.33-23168.74.

DOWNTREND conformation 22613.47, Successful fall below 22499.06 will trigger fall till 22418.19-22313.97-22199.56

RANGE-BOUND trend identification: If all up move invites sale above 22869.24 and all down move invites short covering at 22499.06 level this indication is sufficient to conclude that the price action is in the range of 22869.24 to 22499.06

What trade decision one trader should take?
:
  • Buying above 22754.83
  • STOP-LOSS 22613.47,
  • HEDGE by buying put option of strike below 22613.47, for initial target 22869.24

OR
  • Selling future below 22613.47
  • STOP-LOSS 22754.83,
  • HEDGE buy buying call option of strike above 22754.83, for initial target 22499.06 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 22754.83 cross then you buy the nifty future with 22613.47 put option long. If it achieves the 1st target 22869.24 during the day or any point during the week revise your stop loss to 22798.56 and hold the trade. If the 2nd target 22919.56 achieved, revise the stop loss to 22833.9 and hold the trade. If the 3rd target 22950.11 achieved, then trail or revise the stop loss to 22919.56. 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 22613.47 hits then close the option trade, future long trade and enter the fresh trade in nifty future short and 22613.47 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.

BANK NIFTY Future trend for 15th to 19th May 2017

1 SD Price Range92.36
BANK NIFTY9420.40
Up TrendDown Trend
0.23621.89442.29398.6
0.38235.289455.689385.12
0.546.189466.589374.22
0.61857.089477.489363.32
0.78672.694939347.8
0.88882.029502.429338.38
1.236114.169534.569306.24
1.618149.459569.859270.95

What trade decision one trader should take? Buy above 9455.68 with stop loss 9385.12 for initial target 9477.48. Use the 9442.2 put option buy with long future or 9569.85 call option sell with long future to hedge the trade. If you sell it at 9385.12 hedge it with 9374.22 call or sell below9270.95 put option. Since 0.236 price giving triggering in bank nifty because of its high base value I am changing the entry point to 0.382 price point.

Conclusion: If you look the daily price point in the chart and compare with the weekly levels we have given, you will find our calculated point worked as point of pressure some time and point of revival some time.

Refer the past performance of the 1SD weekly trend calculation (from September 2015 to September 2017)

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