Are you looking for the best bank nifty trading strategy? There must be a reason for you to look out to learn new strategies apart from others.. right?
For sure, I can say one thing about this strategy that it is easy to master.
If you are a beginner, then don’t worry we will guide you from zero to making you a hero.
If you’re new to trading and you know about candlesticks then you may proceed ahead. But, if you do not know anything about candlesticks then you first need to know about the candlestick chart. You can go through this article: What is a candlestick chart?
Best Bank Nifty Trading Strategy
Okay, let us begin!
Firstly, let me tell you about few jargons that I will be using moving forward.
- PIVOT POINTS
- CPR ( Central Pivot Range )
- PDH ( Previous Day High )
- PDL ( Previous Day Low )
Pivot points are based on open, high, low & close of the previous day. Pivot points are leading indicators, unlike the lagging indicators.
Pivot points have a central pivot, 3 resistance levels above, and 3 support levels below namely, R1 R2 R3 & S1 S2 S3.
These are purely based on price hence can be used in price action trading.
If you want to know in-depth about the pivot points then go through this article: What are Pivot Points?
CPR (Central Pivot Range)
CPR which is the Central Pivot Range or the Pivot Range is nothing but 3 lines calculated on the previous days high low and close.
CPR has three lines, namely:
- TC (Top central level)
- Central Pivot
- BC (Bottom central level)
These three lines together are called the Pivot range or the Central Pivot Range i.e; CPR.
There are many uses of CPR as it acts as a strong Support/Resistance as well as indicates the volatility of the day.
If you want to know more about CPR then you may read this article: All you wanted to know about CPR.
Previous Day High (PDH)
The previous day high is the high of the previous trading session.
This is an essential level as many traders keep an eye on the high of the previous day, so you can use it in your trading arsenal.
Previous Day Low (PDL)
The previous day’s low is the low of the previous trading session.
This is an essential level as many traders keep an eye on the low of the previous day, so you can use it in your trading arsenal.
Since you are now aware of the jargons used in this strategy, let us proceed ahead and know about the Bank Nifty Trading Strategy.
If Bank Nifty opens above today’s R1 and above PDH and the first 3 or 5 minutes candle makes a bullish candle like a Bullish hammer or a Bullish Marubozu, then you may take a buy position by having good risk management in place. If you don’t know what is risk management then you may refer to this article: Risk Management for Traders
NOTE: Having a STOPLOSS below your entry candle is advised. Consult your financial advisor before using this strategy. This strategy is only given for educational purposes.
If Bank Nifty opens below today’s S1 and below PDL and the first 3 or 5 minutes candle makes a bearish candle like a Bearish hammer or a Bearish Marubozu, then you may take a sell position by having good risk management in place. If you don’t know what is risk management then you may refer to this article: Risk Management for Traders
NOTE: Having a STOPLOSS above your entry candle is advised. Consult your financial advisor before using this strategy. This strategy is only given for educational purposes. Test the strategy with 1 Quantity (in the case of bank nifty with 25 qty).
Have a stop loss below the entry candle or according to your risk appetite.
Always aim for a 1:2 risk-reward ratio. That means you must get double the reward of what you are risking.
Also, if you have any financial advisors consult them before using this strategy. I have written this article only for educational purposes, I am not a registered financial professional, I’m just sharing what I know.
Me nor my blog: pandasurfer.com is not responsible if you incur any loss.
Thank you for reading this article!