SMA Strategy: Bank Nifty, Nifty, and FinNifty
Overview
The SMA Strategy is based on the 30-period Simple Moving Average (SMA) for buy and sell confirmation. This strategy aims to identify buying opportunities when the market crosses above the 30-period SMA and 20-20 SMA, indicating potential bullish momentum, and selling opportunities when the market crosses below the 30-period SMA, signaling potential bearish momentum.
This strategy is designed to capture trend reversals or continuations by using the 30-period SMA as dynamic support or resistance levels. It is suitable for traders looking to trade trend-following strategies based on moving average crossovers.
The SMA strategy has predefined targets and stop-loss levels based on the market's volatility and range, ensuring clear risk management parameters for trades.
SMA Value of SMA banknifty has been changed from 50 to 30. As, change in expiry and lot size, movement of Banknifty has been changed now. SMA may generate more signals than before.
Symbol Meanings on the Chart:
TP: Target
SL: Stop Loss
LE: Long Entry (Call Option Buy)
SE: Short Entry (Put Option Buy)
DSE: Call Option Exit and simultaneously Put Option Buy
DLE: Put Option Exit and simultaneously Call Option Buy
Strategy Details
Time Frames & Parameters:
1. BANK NIFTY:
Time Frame: 45 minutes
Trading Hours: 10:00 AM to 3:00 PM
Range: 1600 points
Stop Loss: 100 points
Target: 100 points
2. NIFTY:
Time Frame: 30 minutes
Trading Hours: 9:30 AM to 3:00 PM
Range: 700 points
Stop Loss: 50 points
Target: 50 points
3. FINNIFTY:
Time Frame: 30 minutes
Trading Hours: 9:30 AM to 3:00 PM
Range: 700 points
Stop Loss: 50 points
Target: 50 points
Buy Logic (Long Position)
Bank Nifty: When the market crosses above the 30-period SMA indicating bullish momentum.
Nifty/FinNifty: When the market crosses above the 20-20 SMA indicating bullish momentum.
After taking the entry, predefined targets and stop-loss levels are set based on market volatility and range.
The strategy works on 45-minute time frames for Bank Nifty, and 30-minute for Nifty and FinNifty.
The number of signals generated per script depends on market movements and conditions.
Sell Logic (Short Position)
Bank Nifty: When the market crosses below the 30-period SMA signaling bearish momentum.
Nifty/FinNifty: When the market crosses below the 20-20 SMA signaling bearish momentum.
After taking the entry, predefined targets and stop-loss levels are set based on market volatility and range.
The strategy works on 45-minute time frames for Bank Nifty, and 30-minute for Nifty and FinNifty.
The number of signals generated per script depends on market movements and conditions.
Key Points to Remember:
Capital Management:
Maximum Capital Usage: Do not use more than 50% of your total capital at any time.
Consistency:
Work daily with linear discipline. Don’t trade 1 lot today and suddenly trade 4-5 lots tomorrow. Maintain a steady approach.
Market Conditions:
This strategy works best in trend-following markets.
In sideways markets, the strategy may not perform well, and it may result in no profit/no loss.
The strategy is effective during rallies, whether they are buying or selling rallies.
Risk Management:
Always use the predefined stop-loss and target levels to manage risks effectively.
Ensure you’re comfortable with the risk before executing trades.
Customization: You can customize the parameter settings according to your risk profile and capital.
Disclaimer:
Market Risk: All strategies are subject to market risk.
No guaranteed returns: We do not promise or guarantee returns. Results depend on market conditions.
Backtest Reports: Backtest results do not guarantee future or fixed returns. Actual performance may vary depending on market movements.
Trading Risks: Trading in Index Options is inherently high-risk. Always trade within your risk tolerance and avoid excessive risk.
Contact Information:
For more details or personalized assistance, feel free to reach out:
Email: brainautotech1902@gmail.com
WhatsApp: +91 6264687918 (Vivek)
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