Nifty 2 Points - How to trade

#1
Hello ,

I am interested in going ahead with scalping.
Am interested in only 2 points in NIFTY (one trade per day)
(ie 1 point in the nifty option) using Zerodha for big number of lots (200 - 300).

Would like to get some guidance from the experienced members.

1. Is it worthwhile to look at Oscillators (RSI / MACD / ROC etc)
(Cause only for a target of 2 points and a short time frame of a couple of minutes).
If yes , which would be the best indicators for this and approach to use them.

2. What would be a better way to get to capture those 2 points with more surety. (Other observations to consider and how - volume / time of day / buy-sell difference etc)

3.What would be a good system to place the orders.
(My thought For eg. when Nifty is at 5000 -
Place a SL-L order to buy at 5010 and immediately place an order to sell the entire at 5011). During the day if NIFTY does cross 5010 both orders will get execute and fetch the 1 point. Likewise do for a PUT option incase downward.
Either way my buy and sell must be executed.
Only flaw is that if it just touches 5010 and does not go to 5011 - thats a risk which must be taken and some experience or comments here may advise how to get the better of such situations.

Please suggest Money management and safety techniques.

4. Is 300 - 500 lots a big number - to affect the pricing.
(Any limit to number of lots that can be traded by an individual)

Looking forward to some good advise.

Thanks

My thought process is such -
1. Options provide the highest multiplication factor than Cash / Future / Margin by broker etc
2. Interested in scalping - as I find it difficult to "predict" direction of markets during the day or week or month.
Really impressed with credit spreads (understand options well also) but do not really think that will be able to get a good assessment of the movement in the month. Better to grasp what we can
3. With just 1 point per day (getting .5% of return on capital translates to 12% per month which is phenomenal)
 
#2
Its a high risk strategy. What's the stop loss you plan to use?

For example you enter first trade of the day, you lose 2 points, with 200 lots of nifty it means you lose Rs.20,000 in first trade. What now? To make up the loss you need 4 points in the next trade and if that also becomes a loss. Its a vicious cycle.

Such strategies with less points and high lots are high risk strategies. Look at yesterday, when Nifty went crashing down because of a freak order. In any case, some news can send Nifty hurtling down 50 points within seconds. What happens in such a situation? Its an extremely high risk strategy. If 3 consecutive trades go against you, you will be wiped out!!!

Instead of that, you can scalp for 4-5 points with 1 or 2 lots and have mulitple trades a day. That will be less risky as even if 2 or 3 trades go against you won't lose too much.
 

Rish

Well-Known Member
#3
Hello ,

I am interested in going ahead with scalping.
Am interested in only 2 points in NIFTY (one trade per day)
(ie 1 point in the nifty option) using Zerodha for big number of lots (200 - 300).

Would like to get some guidance from the experienced members.

1. Is it worthwhile to look at Oscillators (RSI / MACD / ROC etc)
(Cause only for a target of 2 points and a short time frame of a couple of minutes).
If yes , which would be the best indicators for this and approach to use them.

2. What would be a better way to get to capture those 2 points with more surety. (Other observations to consider and how - volume / time of day / buy-sell difference etc)

3.What would be a good system to place the orders.
(My thought For eg. when Nifty is at 5000 -
Place a SL-L order to buy at 5010 and immediately place an order to sell the entire at 5011). During the day if NIFTY does cross 5010 both orders will get execute and fetch the 1 point. Likewise do for a PUT option incase downward.
Either way my buy and sell must be executed.
Only flaw is that if it just touches 5010 and does not go to 5011 - thats a risk which must be taken and some experience or comments here may advise how to get the better of such situations.

Please suggest Money management and safety techniques.

4. Is 300 - 500 lots a big number - to affect the pricing.
(Any limit to number of lots that can be traded by an individual)

Looking forward to some good advise.

Thanks

My thought process is such -
1. Options provide the highest multiplication factor than Cash / Future / Margin by broker etc
2. Interested in scalping - as I find it difficult to "predict" direction of markets during the day or week or month.
Really impressed with credit spreads (understand options well also) but do not really think that will be able to get a good assessment of the movement in the month. Better to grasp what we can
3. With just 1 point per day (getting .5% of return on capital translates to 12% per month which is phenomenal)
Not possible at all.
 

Anillal

Active Member
#4
Hello ,

I am interested in going ahead with scalping.
Am interested in only 2 points in NIFTY (one trade per day)
(ie 1 point in the nifty option) using Zerodha for big number of lots (200 - 300).

Would like to get some guidance from the experienced members.

1. Is it worthwhile to look at Oscillators (RSI / MACD / ROC etc)
(Cause only for a target of 2 points and a short time frame of a couple of minutes).
If yes , which would be the best indicators for this and approach to use them.

2. What would be a better way to get to capture those 2 points with more surety. (Other observations to consider and how - volume / time of day / buy-sell difference etc)

3.What would be a good system to place the orders.
(My thought For eg. when Nifty is at 5000 -
Place a SL-L order to buy at 5010 and immediately place an order to sell the entire at 5011). During the day if NIFTY does cross 5010 both orders will get execute and fetch the 1 point. Likewise do for a PUT option incase downward.
Either way my buy and sell must be executed.
Only flaw is that if it just touches 5010 and does not go to 5011 - thats a risk which must be taken and some experience or comments here may advise how to get the better of such situations.

Please suggest Money management and safety techniques.

4. Is 300 - 500 lots a big number - to affect the pricing.
(Any limit to number of lots that can be traded by an individual)

Looking forward to some good advise.

Thanks

My thought process is such -
1. Options provide the highest multiplication factor than Cash / Future / Margin by broker etc
2. Interested in scalping - as I find it difficult to "predict" direction of markets during the day or week or month.
Really impressed with credit spreads (understand options well also) but do not really think that will be able to get a good assessment of the movement in the month. Better to grasp what we can
3. With just 1 point per day (getting .5% of return on capital translates to 12% per month which is phenomenal)
It may work once a while but overall such method will kill your account in no time as slippage is stacked against the trader. 2 points trade is not scalping it is chain snatching sort of. :) Why don't you try entering 3 lots for 7-8 points and keep repeating the procedure both ways? It has better probability than 2 points per 200 lots.
 
#5
Thanks for the caution. Agreed that I am limiting my gain (small) by placing a sell order and scope of loss could be huge.

I have 10 - 12 L available for trading capital.
Whats the point in doing only 2 - 3 lots. Of course I am sensible enough to start steady but still.

And why would a fall of 50 -(or any) points affect me , My idea is to ensure that the buy and sell order get executed almost one by one. I am not buying now and waiting for the increase.
Will that be possible. Will I be able to buy a huge quantity at a single price.
That is to say , In case Nifty goes upward from 5000 to 5010 onwards , I have already placed the order to buy 200 lots at 5010 - But will I be able to get , It may be possible that I get only a few lots and then the price increases further.

Eg.
Present : Nifty - 5000
Order Placed :
1.
SL-L
When Nifty touches 5010 - buy 200 lots of ATM Nifty Option within upper limit of 5011.
2.When Nifty touches 5011 , sell 200 lots of the same at lower limit of 5012

In case Nifty goes up - most likely that both orders will get executed. Hence 1 point profit.
If not then , both will not get executed - Nothing happens.

Issues : How exactly does Stop Loss Limit Order work , has to be well understood.
This would work flawlessly for small number of lots as the buy order would definitely get fulfilled , but will it for 200 - 400 lots ?

Any other way that the loss can be controlled , by managing the quantity and order placement.
 
#6
For such a scalp, look at stochastics on 1 min TF. Buy when the stoch is very close to zero. On 1 min TF it does touch zero many times a day. The recommended setting for stochs (recommended here on TJ) is 8,4,3. Sharekhan's default setting of 5,3,5 is pretty fast too.

For other strategies, you can look up "EMA strip in BB" and follow it on 1 min TF.

Do tell us of your results.

If you are trading options, for options below 50rs, you can have a target of 50 paisa too.
 
#7
my advice is that go with this experiment with 1 or 2 percent of ur capital and then decide. in the beginnig do not tri to earn money tri to earn a sucessfull system.:thumb:
 

Anillal

Active Member
#9
Please dont ignore the flash crash type of occurances.... can wipe out an years Profits in a 'flash' !!
Please do not worry about flash crashes sir. The frequency with which they have started happening soon you may find a thread titled 'HOW TO TRADE FLASH CRASH' somewhere. And we being the only jugadoo people on the globe we may have an AFL for the same in no time as well, fitted with a patent indicator called FC indicator! :D
 

soft_trader

Well-Known Member
#10
Please do not worry about flash crashes sir. The frequency with which they have started happening soon you may find a thread titled 'HOW TO TRADE FLASH CRASH' somewhere. And we being the only jugadoo people on the globe we may have an AFL for the same in no time as well, fitted with a patent indicator called FC indicator! :D
Ha ha ha ha ... well said. :D :lol: :rofl::rofl::rofl::rofl: