Hello, my dear friend. I hope you are doing well. We all started trading to make some money but many time we don’t know what to do when the market behaves abnormally. In this weekly analysis and weekly option trading strategies post, let’s talk about how we can deal with this situation.
Many times you will see that the market is unpredictable. You saw wild moves in both directions. In the first half, the market gives us an upside movement, and it looks like that trend is entirely UP, but in the second half, it gives the exact moment, but in the opposite direction, means downward.
In these wild movements, you can see that we are not going anywhere despite these movements. The market is trading in a range only. If you are following our TradePik’s Telegram Channel, I shared that the range of Nifty is 18100 – 18400, but on Monday, we saw a good rally in the market everyone on social media starts saying that now Nifty will go UP but what happened on expiry? Nifty returned and expired in the same range we have shared.
When the market is trading in a range, you will get many whipsaws in trend-following strategies. At this time, the most important thing is, “How do you keep yourself calm to make a better decision?”
If your decisions are coming from your emotions, emotions like “Fear or Greed,” then it’s a dangerous thing, especially for a retail trader. You should work and develop a system that can help to keep yourself calm in every situation.
Now you have two options: teach yourself how to handle your emotions or create a system that can help keep yourself calm in any situation. I prefer an easy one, i.e., creating a system that can help keep you away from any emotional decision. Now the question is:
How to create that system?
As per my experience, you will find yourself trapped in emotions only if you get something unexpected. Like an unexpected profit or a sudden loss. So if we manage to create a system that keeps our risk and reward on the limited side, Then the system will do our 50% work. Rest 50% is to follow and implement that system with proper discipline.
You can follow below 5 steps to create a trading system for you:
- Define your trading goals: Start by clarifying what you want to achieve with your trading system. Are you aiming for long-term growth, short-term profits, or risk management? Identifying your objectives will help shape the design of your system.
- Choose a trading strategy: Select a strategy that aligns with your goals and matches your trading style. It could be trend following, mean reversion, breakout trading, or any other approach. The strategy should have clear rules for entering and exiting trades.
- Develop a set of rules: Once you have chosen a strategy, define a set of specific rules that will guide your trading decisions. These rules should cover aspects such as when to enter a trade when to exit, how much to invest in each trade, and any risk management measures you’ll employ.
- Test and refine your system: Before risking real money, it’s crucial to test your trading system using historical data. This process, known as backtesting, involves applying your rules to past market conditions and assessing the system’s performance. Make adjustments as needed to improve its effectiveness.
- Implement and monitor your system: Once you are satisfied with the results of your backtesting, it’s time to implement your trading system in real-time trading. Monitor its performance regularly, keep track of your trades, and evaluate if the system is meeting your goals. Adjustments may be necessary based on ongoing analysis and feedback from the market.
Following your system with proper discipline and patience is the crucial part that you have to teach yourself. In starting, it may look a little tough because you don’t have that experience, but once you start following and gain some experience, you will get your confidence back, and things will become smoother for you. Now you will ask:
Do we need need to create a new or unique system for ourselves?
No, We don’t need to create any new or unique system for ourselves. We already have. We have “Non-Directional Limited Risk Options Strategies.” Options strategies like Iron Condor, Butterflies, etc. These strategies help keep your risk on the limited side and generate some consistent return without any worry about a gap-up or gap-down opening in this highly volatile market. Like the market, we can see nowadays.
My reasons to follow and trade with these strategies are simple. I don’t want to spoil my quality time with my kids because tomorrow’s market may gap up or gap down due to any global or domestic news.
I don’t want to spend the whole night looking at my phone screen to track SGX-Nifty because it is behaving unexpectedly.
We all want a stress-free life. A Stress-Free experience is only possible when you know how much max loss you have in the system if tomorrow’s market opens gap-up or gap-down by 20%. I know the probability is very low for such events, but why take a risk when you have responsibilities? After all, we all are trading to generate some extra income to fulfill our obligations.
I hope now you understood why it’s important that we need a system that helps us generate some consistent return by keeping our risk on the limited side to protect our capital. And these “Non-directional Limited risk strategies” are working very correctly.
So I suggest you should start learning and implementing these strategies, especially in this highly volatile market. We, too, have a unique Option Strategies – A Mentorship Program where you can learn and implement these strategies with my live mentorship. I will be there to help and solve all your queries related to options strategies.
Nifty weekly market outlook with weekly option trading strategies
As I shared last week that 18100 – 18400. Nifty should give a breakout or breakdown from this range for further levels. This week, we saw that nifty gave a breakout and tried to sustain below 18400 but couldn’t succeed and expire between the range.
If you look at the chart you will find that we saw a good upside rally in Nifty from taking support from 16800. Now change for profit booking is very high. So trail stoploss if holding long position.
For the coming week, I have mentioned important levels on the chart above. 18065 – 18000 is the crucial support zone for the coming week. A breakdown from this zone will lead to further downside levels i.e. 17827, 17636.65 & 17460.
For the upside, 18245 is acting as an important resistance level and we can initiate a long position again if manage to sustain above this level. The next upside target would be 18680.
As I have suggested earlier, Trade with limited risk range-bound strategies here. Learn these strategies from here: Option Strategies: A Mentorship Program
Nifty weekly Options Chain Analysis
Based on option chain data, the highest Open interest stands at 18200 CE & 18000 PE, followed by 18100 CE & 18100 PE. PCR of all strikes is 0.73, which indicates a neutral market. PCR at 18000 stands at 2.52, which is acting as an immediate support level.
The Put-call ratio at 18300 stands at 0.36, which is acting as a resistance level. Equally, important indicator Option Pain is at 18100, indicating weekly expiry at 18100. A shift in option pain will provide further levels of expiry. So keep tracking max pain.
Significant open interest buildup on both sides, which indicates that the market is facing support from both the side. So as per the weekly analysis and Open Interest data
- support 2 = 17900,
- Support 1 = 18000,
- Resistance 1 = 18300 and
- Resistance 2 = 18400
Keep tracking open interest to analyze market participant’s behavior. If you don’t know how to analyze open interest for weekly option hedging strategies. Just enroll for our Option Strategies – A Mentorship Program.
Nifty weekly option trading strategies: Iron Condor
Initially, you can keep a stop loss of 17950 & 18350 for this strategy. This means square off if you find nifty is giving a breakout or breakdown. Or you can do the below adjustment.
If you find that Nifty is giving a breakdown and sustaining below 17900, then square off the 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 18400. You can shift your put spread to 300 points.
We will do some more adjustments to make it a low-loss or no-loss strategy to reduce the risk and increase profitability. To learn these adjustments either you can join our Mentorship Program or join the premium telegram channel.
If you want to learn these strategies and their adjustments in more practical ways with live mentorship, You can enroll in our Option Strategies – A Mentorship Program(20% OFF).
BankNifty Weekly Analysis with weekly option trading strategies
In this upside rally banknifty has completely outperformed Nifty. Now trading near the all-time high levels gives a signal of caution that the chances of profit booking are very high.
At this level, neither I’m bullish nor bearish, in fact, banknifty is trading in no trade zone. If you have already held a long trade, this is the time to book profit. 42827 is the support level that you can keep on the radar. A breakdown from this level will generate a sell signal for the target of 42045.
On the Upside, 41100 – 41550 is the zone that needs to break a fresh buy signal.
In short, go short only below 42827 and long only above 41550. Till then trade with range-bound strategies only.
BankNifty Weekly options chain analysis
Based on option chain data, the highest Open interest stands at 44000 CE & 43500 PE, followed by 43800 CE & 43000 PE. PCR of all strikes is 0.78, which indicates a neutral market. PCR at 43000 stands at 3.84, which is acting as an immediate support level.
The Put-call ratio at 44000 stands at 0.31, which is acting as a resistance level. Equally, important indicator Option Pain is at 43700, indicating weekly expiry at 43700. A shift in option pain will provide further levels.
Remember one thing: When IV is high, data can change anytime so keep following more closely.
If you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.
Bank Nifty best weekly option trading strategies: Iron Condor
If you find that BankNifty gives a breakdown and sustains below 43000, 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 44200. You can shift your put spread to 1000 points up.
We will do some more adjustments to make it a no-loss strategy to reduce the risk and increase profitability. To learn these adjustments either you can join our Mentorship Program or join the premium telegram channel.
If you want to learn these Weekly expiry options strategies and their adjustments in more practical ways with live mentorship, You can enroll in our Option Strategies – A Mentorship Program(33% OFF).
Post your comments in the comment box if you have a query related to weekly analysis and weekly option trading strategies. You can ask any question related to options trading in the comment box.
If you need more real-time assistance on Nifty and Bank nifty weekly analysis and options strategies Can take our premium subscription or open a trading account with us and you will get real-time assistance every month on these weekly options strategies. You can contact us on WhatsApp
*( Please avoid any questions like which Call or Put we should buy in the coming week).
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DISCLAIMER: – we are not a SEBI research analysts. Views are 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.