How to do intraday and positional trade using 1SD formula?

What is 1 SD formula?

Price range = (Price * volatility * square root of day) /square root of 365

How to find weekly trend of nifty using the volatility and 1 SD formula?

Example: Now nifty future of September 2015 expiry last recorded trade is 7785, yearly volatility of nifty is 15.6% .we are going to find the weekly trend hence days will be 7 calendar days.

Price range = 0.156*7785*sqrt(7)/sqrt(365)=168.18

Example :

	1SD Price Range	168.1844
	LTP	7851
Trend expectation as per Fibonacci
0.236	39.69048	7824.69	7745.31
0.382	64.24476	7849.245	7720.755
0.5	84.09	7869.09	7700.91
0.618	103.93524	7888.935	7681.065
0.786	132.18948	7917.189	7652.811
0.888	149.34384	7934.344	7635.656
1.236	207.87048	7992.87	7577.13
1.618	272.11524	8057.115	7512.885

Trend expectation as per volatility: Uptrend conformation 7825, successful cross over above 7869 will target 7889-7934-8057. Down trend conformation 7743 successful fall below 7701 will trigger fall till 7681-7635-7513.

Range bound trend identification: Uptrend conformation 7825, successful cross over above 7869 will target 7889-7934-8057. Down trend conformation 7743 successful fall below 7701 will trigger fall till 7681-7635-7513.

What trade decision one trader should take?

a. Buying above 7827 with initial stop loss of 7743 for initial target 7895 or selling future below 7743 with stop loss 7827 for target 7674 is advisable. These levels are weekly levels and not to be used for intraday. Similar calculation you can do for intraday with daily volatility.

How to find intraday trend of nifty using the volatility and 1 SD formula?

Example: Now nifty future of September 2015 expiry last recorded trade is 7785, yearly volatility of nifty is 15.6% .we are going to find the intraday trend hence days will be 1 calendar days.

Price range =0.156*7785*sqrt(1)/sqrt(365)=63.56

	1SD Price Range	63.56774
	LTP	7785
Trend expectation as per Fibonacci
0.236	15.00198704	7800.002	7769.998
0.382	24.28287733	7809.283	7760.717
0.5	31.78387085	7816.784	7753.216
0.618	39.28486437	7824.285	7745.715
0.786	49.96424498	7834.964	7735.036
0.888	56.44815463	7841.448	7728.552
1.236	78.56972874	7863.57	7706.43
1.618	102.8526061	7887.853	7682.147

Trend expectation as per volatility: Uptrend conformation 7800, successful cross over above 7824 will target 7841-7863-7887. Down trend conformation 7770 successful fall below 7745 will trigger fall till 7729-7706-7782

Range bound trend identification: if all up move invites sale above 7825 and all down move invites short covering at 7745 level this indication is sufficient to conclude that the price action is in the range of 7825 to 7745. This is the Fibonacci 0.618 trade level

What trade decision one trader should take?

Buying above 7800 with initial stop loss of 7770 for initial target 7825 or selling future below 7770 with stop loss 7800 for target 7746 is advisable. One can use the trailing stop loss method or options to hedge the profit once the target achieved.

This method is improvised by us in our paid software by adding the Fibonacci cluster (i.e. the strongest resistance and support generated by multiple Fibonacci lines). We have also taken the gap up or gap down opening factor and real time volatility to improve its success in intraday and positional trade.

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