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. 23rd to 26th April 2018).

What is 1SD formula?

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

Nifty future of ril 2018 expiry last recorded trade is 10595.40, 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 10624.57, Successful cross-over above 10671.79 will target rise till 10705.17-10748.19-10795.41.

DOWNTREND conformation 10566.23, Successful fall below 10519.01 will trigger fall till 10485.63-10442.61-10395.39

RANGE-BOUND trend identification: If all up move invites sale above 10671.79 and all down move invites short covering at 10519.01 level this indication is sufficient to conclude that the price action is in the range of 10671.79 to 10519.01

What trade decision one trader should take?

• Buying above 10624.57
• STOP-LOSS 10566.23,
• HEDGE by buying put option of strike below 10566.23, for initial target 10671.79

• Selling future below 10566.23
• STOP-LOSS 10624.57,
• HEDGE buy buying call option of strike above 10624.57, for initial target 10519.01 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 10624.57 cross then you buy the nifty future with 10566.23 put option long. If it achieves the 1st target 10671.79 during the day or any point during the week revise your stop loss to 10642.62 and hold the trade. If the 2nd target 10692.56 achieved, revise the stop loss to 10657.21 and hold the trade. If the 3rd target 10705.17 achieved, then trail or revise the stop loss to 10692.56. 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 10566.23 hits then close the option trade, future long trade and enter the fresh trade in nifty future short and 10566.23 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.