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. 30th Jul to 3rd Aug).

What is 1SD formula?

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

Nifty future of 3rd Aug expiry last recorded trade is 11307.5, 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 11333.98, Successful cross-over above 11376.83 will target rise till 11407.12-11446.16-11489.02.

DOWNTREND conformation 11281.02, Successful fall below 11238.17 will trigger fall till 11207.88-11168.84-11125.98

RANGE-BOUND trend identification: If all up move invites sale above 11376.83 and all down move invites short covering at 11238.17 level this indication is sufficient to conclude that the price action is in the range of 11376.83 to 11238.17

What trade decision one trader should take?

• Buying above 11333.98
• STOP-LOSS 11281.02,
• HEDGE by buying put option of strike below 11281.02, for initial target 11376.83

• Selling future below 11281.02
• STOP-LOSS 11333.98,
• HEDGE buy buying call option of strike above 11333.98, for initial target 11238.17 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 11333.98 cross then you buy the nifty future with 11281.02 put option long. If it achieves the 1st target 11376.83 during the day or any point during the week revise your stop loss to 11350.36 and hold the trade. If the 2nd target 11395.68 achieved, revise the stop loss to 11363.59 and hold the trade. If the 3rd target 11407.12 achieved, then trail or revise the stop loss to 11395.68. 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 11281.02 hits then close the option trade, future long trade and enter the fresh trade in nifty future short and 11281.02 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.