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 26th Sept).

What is 1SD formula?

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

Nifty future of 6th Sept expiry last recorded trade is 7965, 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 8004.05, Successful cross-over above 8067.25 will target rise till 8111.92-8169.5-8232.71.

DOWNTREND conformation 7925.95, Successful fall below 7862.75 will trigger fall till 7818.08-7760.5-7697.29

RANGE-BOUND trend identification: If all up move invites sale above 8067.25 and all down move invites short covering at 7862.75 level this indication is sufficient to conclude that the price action is in the range of 8067.25 to 7862.75

What trade decision one trader should take?

• Buying above 8004.05
• STOP-LOSS 7925.95,
• HEDGE by buying put option of strike below 7925.95, for initial target 8067.25

• Selling future below 7925.95
• STOP-LOSS 8004.05,
• HEDGE buy buying call option of strike above 8004.05, for initial target 7862.75 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 8004.05 cross then you buy the nifty future with 7925.95 put option long. If it achieves the 1st target 8067.25 during the day or any point during the week revise your stop loss to 8028.2 and hold the trade. If the 2nd target 8095.05 achieved, revise the stop loss to 8047.73 and hold the trade. If the 3rd target 8111.92 achieved, then trail or revise the stop loss to 8095.05. 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 7925.95 hits then close the option trade, future long trade and enter the fresh trade in nifty future short and 7925.95 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.