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. 13th to 17th June 16).

What is 1SD formula?

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

Nifty future of June 16 expiry last recorded trade is 8196, 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 8228.49, Successful cross-over above 8281.09 will target rise till 8318.26-8366.17-8418.76.

DOWNTREND conformation 8163.51, Successful fall below 8110.91 will trigger fall till 8073.74-8025.83-7973.24

RANGE-BOUND trend identification: If all up move invites sale above 8281.09 and all down move invites short covering at 8110.91 level this indication is sufficient to conclude that the price action is in the range of 8281.09 to 8110.91

What trade decision one trader should take?

• Buying above 8228.49
• STOP-LOSS 8163.51,
• HEDGE by buying put option of strike below 8163.51, for initial target 8281.09

• Selling future below 8163.51
• STOP-LOSS 8228.49,
• HEDGE buy buying call option of strike above 8228.49, for initial target 8110.91 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 8228.49 cross then you buy the nifty future with 8163.51 put option long. If it achieves the 1st target 8281.09 during the day or any point during the week revise your stop loss to 8248.59 and hold the trade. If the 2nd target 8304.22 achieved, revise the stop loss to 8264.84 and hold the trade. If the 3rd target 8318.26 achieved, then trail or revise the stop loss to 8304.22. 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 8163.51 hits then close the option trade, future long trade and enter the fresh trade in nifty future short and 8163.51 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.