Hello Friends!

1 SD formula is giving success in weekly forecast, from last 119 weeks. Below levels is the weekly level for future and bank nifty future for 135th week (i.e. ).

What is 1SD formula?

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

Nifty future of expiry last recorded trade is , 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 0, Successful cross-over above 0 will target rise till 0-0-0.

DOWNTREND conformation 0, Successful fall below 0 will trigger fall till 0-0-0

RANGE-BOUND trend identification: If all up move invites sale above 0 and all down move invites short covering at 0 level this indication is sufficient to conclude that the price action is in the range of 0 to 0

What trade decision one trader should take?

• Buying above 0
• STOP-LOSS 0,
• HEDGE by buying put option of strike below 0, for initial target 0

• Selling future below 0
• STOP-LOSS 0,
• HEDGE buy buying call option of strike above 0, for initial target 0 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 future levels?

On Monday or any time during the week if nifty 0 cross then you buy the nifty future with 0 put option long. If it achieves the 1st target 0 during the day or any point during the week revise your stop loss to 0 and hold the trade. If the 2nd target 0 achieved, revise the stop loss to 0 and hold the trade. If the 3rd target 0 achieved, then trail or revise the stop loss to 0. 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 0 hits then close the option trade, future long trade and enter the fresh trade in nifty future short and 0 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.