The 12 most liquid and high-capacity stocks in the banking industry make up the Bank NIFTY index. This index, which was introduced in 2009 and is now actively traded on the stock market, is so popular that many traders make their living only by specialising in Bank NIFTY. Stock market classes in Ahmedabad are currently flooded with Bank NIFTY tips and tutorials on how to trade in Bank NIFTY since many traders who have concentrated on the trading of Bank NIFTY options have developed a variety of bank option trading techniques over the years.
Pros and Cons of Trading in Bank Nifty
Both advantages and disadvantages of Bank NIFTY exist. On the one hand, Bank NIFTY’s strong volatility makes it particularly appealing to traders wanting to make a quick profit because price spikes are more frequent. Due to the fact that any profit margin above 2% to 3% every day qualifies as a successful trading day, this attribute also makes it more enticing to intraday traders. However, it is precisely this volatility that makes Bank NIFTY so dangerous. Simply put, the price is likely to change, and if you can’t keep up, your chances of losing money—along with the amount of money you might lose—are increased.
Bank Nifty Intraday Option strategies
As discussed earlier, stock market courses in Ahmedabad teaches a lot of powerful and profitable Bank Nifty intraday option strategies and some of them are discussed in detail below. If you follow these strategies with proper backtesting and risk management, you will definitely be able to generate good profits during the day
- 5-minute candle chart strategy
In your charting software, start by creating a 5-minute Candle Chart. Decide when to start implementing your strategy. The first two candles must be either bullish or bearish at the chosen location. You need to place the purchase order at the high of the second candle if your first two candles are bullish. The stop loss order needs to be placed at that candle’s low after this is triggered. If the two candles are bearish, on the other hand, you would put your buy order at the candle’s low and your stop-loss order as a buy order at the candle’s high.
- Gap Down Sell trade strategy
You must wait for the chart to fill the gap if the market opens with a gap down (a leap to a lower price from the previous day’s finish). You put a sell order when a candle bridges that distance. Analysis and trend studies indicate that the price will probably decline from here. Therefore, the sell order shields you from this price decline. This method is taught in every stock market training course in Ahmedabad and is very effective
- Gap Up Buy trade strategy
The market opens with a gap up, which is the scenario this Bank NIFTY options trading technique is intended for. Once more, you wait for a candle to fill the gap after you spot the market opening with a gap up before moving on to place a buy order. In contrast to the sell trade part of this method, the price is expected to increase, allowing you to potentially make a profit. Even if the gap is typically filled in a day, you should just wait for the gap to be filled in the upcoming days and make your orders then.
These Bank NIFTY option strategies include a crucial stage of setting your targets and stop-losses. Chart a horizontal line starting at the high of the closing candle to determine where the stop loss and targets need to be set.