Nifty Trading System is one of many systems that a trader can choose to adapt to and master. Like with all systems, understanding the logic behind the strategy is what is important. Furthermore, before making use of this system, it is highly advised to master the art of Technical Analysis. With that said, let us learn the Nifty Trading System.

How to Perform the Nifty Trading System?

  • Step 1: Learn how Derivatives work
  • Step 2: Pick a broker that offers the best margins for trading Futures and Options
  • Step 3: Pick any of the strategies you have learned and do a past analysis of its success to determine its efficiency
  • Step 4: Wait until your preferred pattern or indicator confirms to enter into the position
  • Step 5: Establish your Entry, Exit, and Stop Loss
  • Step 6: Enter either a Futures or Options contract based on your time horizon and risk-taking capabilities
  • Step 7: Be mindful of what is going on in the market while your trade is active

Example: The Moving Average Crossover

The moving average cross-over technique is an intraday trading strategy that has survived the test of time. If the cross-over system is followed with strict discipline, no further indicator is necessary. On a 5-minute chart, a basic moving average cross-over method with 55 and 21 bars is a very lucrative intraday nifty trading strategy. Huge gains may be achieved if the trader is disciplined enough to take all of the deals that the system suggests.

This is one of the many strategies that are possible to trade Nifty. In case you require further help in learning the different systems that are best suited for your needs, you may get in touch with us.

Why adopt the Nifty Trading System?

The underlying asset in Nifty derivative transactions such as futures and options is the stated index. This simply means that the derivatives’ price movements are connected to the index’s. Trading in these derivatives allows you to profit from the index’s price fluctuations.

However, there is one thing to keep in mind. Because the index is not a stock, you will not be able to take delivery of it when its derivative contracts expire. Instead, at the conclusion of the expiration, all index derivatives will be required to be cash-settled.

FAQs

How to trade in Nifty Intraday?

For trading Nifty Intraday, it is important that you look for a broker that allows such trading to take place. Most of the brokers do so. Make sure to pick the one that provides the best brokerages.

Minimum amount to invest in Nifty 50

Investing in Nifty 50 can be done through several Mutual Fund houses. The minimum amount to invest in such schemes is Rs. 100. However, to trade the index, the minimum amount depends on the broker you choose.

Is Nifty Trading System Profitable?

There are a lot of factors that go into the Nifty Trading System such as the style of trading (Intraday, Positional). Then the strategy you choose and so on. All in all, as long as one spends a good amount of time researching the system, they can be profitable.

Is Nifty Trading safe?

As with all assets, Nifty also comes with its risks. However, picking a strategy that has greater success than loss ratios is what will make nifty trading safe.

How can I buy Nifty Future?

You can buy Nifty Futures by opening a Demat account with a broker and enabling the derivatives trading segment. Make sure you are properly educated on Technical Analysis as Futures can be risky for a beginner.

Why do traders prefer Bank Nifty or Nifty?

The answer is because these assets have a good Return on Investment. Thanks to margins, the trader need not add a huge amount to be able to take a position in these assets. Furthermore, the returns have the potential to be more than the invested amount in a very short period of time.

References

Maroor, Jnaneshwar Pai. “An Empirical Study of the Effectiveness of various Option Trading Strategies used by the traders using Nifty Index.” Anveshana 3.2 (2013): 43-73. https://search.proquest.com/openview/b9044d3405b492423351e5123445f57f/1?pq-origsite=gscholar&cbl=2046166


0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *