Top 51 Tips to do Option Buying in Nifty.
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1. Always remember Banks constitute a major portion of Nifty (~25%) so keep an eye on BankNifty also while trading in Nifty.
2. Reliance (11%) Infy (7.5%) TCS (5%)& HDFC (5.80 %) are other major contributors, have all info about them to get an idea about Nifty's next move.
2. Reliance (11%) Infy (7.5%) TCS (5%)& HDFC (5.80 %) are other major contributors, have all info about them to get an idea about Nifty's next move.
3. Adanient will enter in Nifty50 from 30th Sep, so watch this one also very carefully. It has very high Beta.
4. While preparing for the next day in Nifty, look at the OI & PA data of these contributors & Nifty itself.
4. While preparing for the next day in Nifty, look at the OI & PA data of these contributors & Nifty itself.
5. Nifty is comparatively less volatile than BNF, but that doesn't mean you can forget about risk management here.
6. Always set daily maximum loss limit beforehand, depending on your account size.
6. Always set daily maximum loss limit beforehand, depending on your account size.
7. Have a loss limit per trade, around 1/3 or 1/4th of your daily loss limit.
8. The quantity you take in each trade will be decided After you decide the SL, not before.
8. The quantity you take in each trade will be decided After you decide the SL, not before.
9. Try to initiate the trades where SL is low.
10. If you can't find a small SL trade & you have to go with a large SL - decrease your quantity accordingly.
10. If you can't find a small SL trade & you have to go with a large SL - decrease your quantity accordingly.
11. Lots of Nifty you can buy = Loss limit per trade/ (Entry - SL)x 50
12. Never exceed your loss limit , both per trade & daily ones.
12. Never exceed your loss limit , both per trade & daily ones.
13. The best time slots to do option buying in Nifty are - 9:15 to 11 & 1:30 to 3:30
14. When the market is dull, esp. during mid-day hours, avoid option buying in Nifty.
14. When the market is dull, esp. during mid-day hours, avoid option buying in Nifty.
15. Prefer spot chart over futures for S/R levels. Use futures chart for volumes.
16. Draw Support & Resistance lines on Major (1D & 60 Min) as well as trading (5-15 Min) TF.
17. The S/R levels which align with S/R from OI are more important.
16. Draw Support & Resistance lines on Major (1D & 60 Min) as well as trading (5-15 Min) TF.
17. The S/R levels which align with S/R from OI are more important.
18. Always initiate your trades from these S/R levels only, it'll ensure your R:R is high.
19. Before initiating any trade, do check the charts & OI data of major constituents of Nifty as well as BNF.
19. Before initiating any trade, do check the charts & OI data of major constituents of Nifty as well as BNF.
20. Try to capture the trend from one S/R level to next S/R level.
21. Using TSL (trailing SL) will ensure you ride maximum of trend.
21. Using TSL (trailing SL) will ensure you ride maximum of trend.
22. Never change your initial SL. This is the biggest favor you can do for yourself.
23. For trading Nifty in intraday 5 & 3 min TF works best.
23. For trading Nifty in intraday 5 & 3 min TF works best.
24. Do not decide your move before the complete closing of the previous candle.
25. Avoid getting caught in Breakout failures. The concept of "Testing" helps a lot with this.
25. Avoid getting caught in Breakout failures. The concept of "Testing" helps a lot with this.
26. Keep an eye on major economic events, Nifty being a major index, gets affected by these.
27. Do not initiate any trade based on just News. Always wait for Data to confirm direction.
27. Do not initiate any trade based on just News. Always wait for Data to confirm direction.
28. Never do Option buying in Nifty 'after' any event, IV will crush & you'll bleed money even if you are right in direction.
29. On Expiry Day, you'll get lots of good scalping opportunities, if you show enough patience.
29. On Expiry Day, you'll get lots of good scalping opportunities, if you show enough patience.
30. If you are enough experienced use 1 min TF for doing scalping in the Last 1.5 hrs of expiry.
31. Keep looking at unwinding & addition of OI at different levels to get an idea about direction.
31. Keep looking at unwinding & addition of OI at different levels to get an idea about direction.
32. Direction sense & Risk management are the biggest edge you can have as an Option Buyer.
33. While going for BTST, always study the data of nifty as well as it's constituents carefully.
33. While going for BTST, always study the data of nifty as well as it's constituents carefully.
34. While taking a trade in direction opposite to the broader trend, decrease the quantity accordingly.
35. Finnifty is affecting Nifty heavily on Tuesdays, so keep an eye on that too.
35. Finnifty is affecting Nifty heavily on Tuesdays, so keep an eye on that too.
36. Don't give too much importance to SGXNifty. It can decide the opening a bit, but what our market does after opening will be decided by our data only.
Those were the 36 Tips.
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