Every time someone asked me about my recommendation for any particular stock, I just requested one thing to them. Have you done your proper calculation before entre into this trade? Like why you took this trade? Or What should be the max risk you are willing to take with this trade? In this Nifty and Bank Nifty weekly expiry strategy post, We will discuss why it is essential to do proper calculation before entre into a trade?
We are getting the most common question: I took this trade at 320₹, and now it is trading at 280₹. What should I do? As per my knowledge and experience, I feel no one can give you the answer except you. Because only you know how much you can effort to lose in a particular trade.
Successful trading is not just about placing the right trade; It’s all about how you are managing your wrong trade. Because if you can manage your wrong trades, you know what you are doing and how to handle things.
Because wrong trades are the ones that will test your knowledge, experience, and behaviour. If you come out successfully without losing much from a wrong trade, that means now you are on the right track.
People are trading based on their gut feeling. They are taking trades based on someone’s advice. They are not calculating the risk associated with that trade. They are taking trades based on the hope that this trade will work. That’s the reason when a trade goes against their expectations, they start a panic.
Stock trading is a business. If you want to be a successful trader, You have to do it in a proper way. You can't just take a random trade with the thought that this trade will work. Read the full article with weekly option strategies.
For a small job, we studied for 25 years. But here in stock trading, we don’t want to give even 25 days to learn and the next 25 days to implement. Everyone wants a quick return.
If someone shared a strategy or a trade, why are we not analysing whether this trade fits in my risk management rules? Now how can we prepare ourselves for any unexpected movement?
Before entry into a trade, we should follow a few things:
- Pick one segment or product that suits your risk appetite and trade only in that segment. Don’t change it every day.
- Every time you want to take a trade, Calculate the risk first. Ask yourself “Can you afford to lose that amount?”
- Every recovery plan should be ready before you enter any trade like what should be your stop-loss and target? If stop-loss hit come out as quickly as you can.
- If you want to take some advice from someone, ask him before entre into a trade. Don’t change your decisions in between the trade.
One thing we should always keep in mind is that, Target is not in our hands. Only stop-loss is. So we have to keep more focus on the things that are in our hands like entry and Stop-loss.
If you do these calculations before entre into a trade, you will find that your trading is more systematic now. And if you trade systematically, chances are high to make decent money from this market.
Now it’s your turn. Make a promise to yourself that you will do proper calculations before entre into a trade. If you need any help from me, just ask me in the comment box I will love to answer all your queries.
If you want to learn and trade with me with proper handholding support for Options hedging strategies, can enrol in our Option Strategies – A Mentorship program
Nifty weekly expiry strategy analysis
As I share in the last Nifty and Bank nifty weekly expiry strategy post, 19000 is a psychological level, and Nifty should hold this level to go higher.
If you look at the chart, you will find that this whole week we saw Nifty trading in the range of 19300 - 19500. Although on Thursday, nifty was trying to give a breakout and made a high of 19567 in the first half, but couldn't sustain and we saw a sharp decline in the second half.
Now this (19300 - 19500) could be the range for the coming session until we are not getting any breakout or breakdown from this level.
Nowadays the Market is trading at a higher level and we can’t neglect the possibility of profit booking from here. So I suggest either book profit and reducing your position in the Market or buy some puts to hedge your portfolio.
As per the chart, Nifty is making higher-Highs and Higher-Lows, indicating that the trend is UP until we are not getting a breakdown from the rising trendline touching HL (higher-lows).
On the Upside 19550 - 19600 is acting as the breakout zone and a breakout will give further upside levels till 19739.
On the downside, 19000 is acting as a strong support level. Only a breakdown will trigger a short signal. So do not take any contra trade and follow the trend.
So these are the levels we should keep in mind:
- Breakout from 19600 = BUY,
- Breakdown from 19000 = SELL
- Trading between 19300 - 19600 = Range-bound
Nifty Weekly expiry option chain analysis
Based on the Option chain data, We can see the highest Open Interest is at 19500 CE & PE followed by 19600 CE and 19400 PE. The highest OI at CE indicates the resistance level and the highest OI at PE indicates the support level.
PCR is also a good indicator to analyze immediate support and resistance levels. If the PCR of any particular strike is below 0.60, this indicates an immediate support level and if PCR is above 2.0 that indicates an immediate resistance level.
At 19300, the PCR value is 6.7, indicating an immediate support level and PCR at 19600 is 0.33, indicating an immediate resistance level.
- Read the detailed article here: How to find Support and Resistance using Put Call Ratio or PCR?
Keep tracking open interest to analyze market participant’s behavior, so that you can adjust your position accordingly. If you don’t know how to analyze open interest for weekly option hedging strategies. Just enrol for our Option Strategies – A Mentorship Program.
Nifty weekly expiry Strategy: Iron Condor
For this weekly expiry strategy, I have tried 6+ weekly strategies and no other strategy is giving as much profit as we are getting from the above strategies while keeping probability on the higher side.
So my logic is simple: Why make things complicated when simple things can work? After all, our ultimate goal is to make money, not to devise a complex strategy to garner social media praise.
That's the reason I only share those strategies which have better risk: reward with a high probability of success.
Initially, you can keep a stop loss of 19300 & 19600 for this strategy. Means square off if you find nifty is giving a breakout or breakdown. Or you can do this adjustment too.
If you find that Nifty is giving a breakdown and sustaining below 19300, then square off call spread and bring it down to 300 points lower levels.
The same thing you can do with put spread means if you got a breakout from 19600. You can shift your put spread to 300 points up.
In the coming week, I will do some more adjustments to reduce the overall risk and increase profit, which you can learn in our Mentorship program.
If you want to learn these Nifty and BankNifty weekly options strategies and their adjustments in more practical ways with live mentorship, You can enrol in our Option Strategies – A Mentorship Program(20% OFF).
Bank Nifty Weekly expiry strategy
In the last 2 weeks, we have seen some profit booking in BankNifty. The best part is Banknifty is still holding 44528 which is a psychological support level and BankNifty need to hold this level for further upside levels.
The overall trend is UP and we may expect range-bound activity until there is no fresh breakout from 45600 or breakdown from 44000 - 44500 zone.
Right now the market is totally unpredictable because IV is increasing so we have to focus more on risk management.
Your risk management rules for every trade must be properly defined. Do not take any trade which has an unlimited risk on either side. If you are good to analyze trends then you can go with some directional credit spreads like Bear Call spread and bull put spread.
Bank Nifty weekly expiry option chain analysis
Based on the Option chain data, We can see the highest Open Interest is at 45000 CE & the same 44700 PE followed by 44800 CE and 44500 PE. Highest OI at CE indicates the resistance level and the highest OI at PE indicates the support level.
PCR is also a good indicator to analyze immediate support and resistance levels. If PCR of any particular strike is below 0.60, this indicates an immediate support level and if PCR is above 2.0 that indicates an immediate resistance level.
At 44300, PCR value is 8.44, indicating an immediate support level and PCR at 45000 is 0.38, indicating an immediate resistance level. So based on the OI data, the weekly range can be 45000 - 44500 and the broad range could be 44500 - 44000.
- Read the detailed article here: How to find Support and Resistance using Put Call Ratio or PCR?
Keep tracking open interest to analyze market participant’s behaviour, so that you can adjust your position accordingly. If you don’t know how to analyze open interest for weekly option hedging strategies. Just enrol for our Option Strategies – A Mentorship Program.
Bank Nifty weekly expiry Strategy: Iron Condor
If you find that BankNifty gives a breakdown and sustaining below 44000, then Shift your Call spread to 1000 points down.
The same thing you can do with put spread means if you got a breakout from 45300. You can shift your put spread to 1000 points up.
If you want to learn these bank nifty weekly expiry strategy and their adjustments in more practical ways with live mentorship, You can enroll in our Option Strategies – A Mentorship Program(20% OFF).
Post your comments in the comment box if you have a query related to the Nifty and Bank Nifty weekly expiry strategy. You can ask any question related to option trading in the comment box.
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*(Please avoid any question like which Call or Put we should buy in the coming week).
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Much Check this also–
- How to Trade Options? 2 best options strategies for beginners
- Options trading is risky, don’t lose your shirt!
- What Wikipedia Can’t Tell You About Trade Options for a Living
DISCLAIMER: – we are not a SEBI research analyst. Views or the nifty and bank nifty weekly expiry strategy posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods. This information should only be used by investors and traders who are aware of the risk inherent in securities trading.