The strategy is for Intra day trading and I have not started using it in the Real Time market. But yes I have analysed the data over months and find it very good which I thought will share you.
The Method
1). EOD Price of NIFTY Futures (1st month) to identify High/Low of a day (Pls note not Spot or Index)
2). Note down the nearest Call Option Strike Price for High & nearest Put Option Strike Price for Low. The base for this is the EOD High Low of Nifty Future 1st month Contract
3). The next day plot 5 min Intra day chart of Nifty Future & parallelly plot 5 min Intra day chart of Call & Put to monitor movement.
4). Wait and watch the price action of Nifty Future 5 min Candle/Bar from 9.15am to 11.00 am
5). Mark High & Low price of 9.15am to 11.00am
6). Wait for a 5 min Candle to completely close above or below the High/Low of the time frame
7). If the 5 min candle/bar breaches the High and closed above the High price of the time frame then look into the chart of Call Option the same time frame where the candle breached the High price in 5 min futures chart. Place the buy order at the High price
8). If the 5 min candle/bar breaches the Low and closed below the Low price of the time frame then look into the chart of Put Option the same time frame where the candle breached the Low price in 5 min futures chart. Place the buy order at the High price
9). The target is Rs.10/- in case of the buy price is above Rs.50/- and the Target is Rs.5/- in case of the buy price is below Rs.50/- This is just my observation and you can keep some % as profit to exit basis the entry price. Say 5% or 10% margin.
10). SL is the entry candle/bar Low price.
The Lots
1). Initially we will be buying 4 lots which means 1 Lot has 25 qty and thus 4 lots is 100 in qty and every Re.1/- movement will give us Rs.100/-
2). In case the buy price is less than Rs.50/- increase the lot size to 8 so that qty is 200
All the above will be confusing right now and will not register but I will take you through the Charts to make this simple
Karthik
