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. 27th to 30th 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 30th Aug expiry last recorded trade is 11572.95, 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 11603.13, Successful cross-over above 11651.98 will target rise till 11686.51-11731.01-11779.86.

DOWNTREND conformation 11542.77, Successful fall below 11493.92 will trigger fall till 11459.39-11414.89-11366.04

RANGE-BOUND trend identification: If all up move invites sale above 11651.98 and all down move invites short covering at 11493.92 level this indication is sufficient to conclude that the price action is in the range of 11651.98 to 11493.92

What trade decision one trader should take?

• Buying above 11603.13
• STOP-LOSS 11542.77,
• HEDGE by buying put option of strike below 11542.77, for initial target 11651.98

• Selling future below 11542.77
• STOP-LOSS 11603.13,
• HEDGE buy buying call option of strike above 11603.13, for initial target 11493.92 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 11603.13 cross then you buy the nifty future with 11542.77 put option long. If it achieves the 1st target 11651.98 during the day or any point during the week revise your stop loss to 11621.8 and hold the trade. If the 2nd target 11673.46 achieved, revise the stop loss to 11636.89 and hold the trade. If the 3rd target 11686.51 achieved, then trail or revise the stop loss to 11673.46. 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 11542.77 hits then close the option trade, future long trade and enter the fresh trade in nifty future short and 11542.77 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.