NIFTY Futures Mechanical Trading

[nadodav]

NIFTY FUTURE For June 24,

Current position : SHORT (at 4515 on 19/06/2008)

Nifty Fut Closed at : 4267.65

Profit/Loss in current trade : +247.35 (as per last closing price)
Net Profit/Loss since thread started : +1900.35 (1653.00+247.35)

Support : 4261
Resistance : 4377

Hold SHORT position with SL 4377. If trades above 4377, exit SHORT & go LONG with SL 4261.

Happy Trading.

Vinod

 

[columbus]

Greetings Vinodji,

What to do when NIFTY breaks your given support level of 4321 (today)?
1) Since your current signal is "to hold short position", should i enter shorts when it broke your Support level of 4321?
2) Hypothetically, Let's say if NIFTY touched 4321 and went back up, then should I enter longs or not? or is it only long when when NIFTY breaks your Resistance levels OF 4482?
3)For example today NIFTY went past your given support level of 4321. Since previously you had mentioned that I should go long near (just above) the support level, i blindly went long and burnt my fingers today. After further reading, just realized that back then, your "overall signal" was long and so it made sense to go long just a little bit above your support level. (Am I correct in understanding?)
4)Today since your "overall signal" was to go short:
Ideally I could have waited until NIFTY comes just below the given Resistance level to short. (This was similar to your answer that you had given to me before, just reversed.) The confusion was what to do when NIFTY broke your support level since your current position is to stay short. Was it wise for some one to go short when it broke your support level?

If you already have answered a similar query, some one can just let me know or better tell me what page so I can read it up. I am yet to complete reading this whole thread.

Thanks,

Rajesh

Market is in severe BEAR grip and lost over 300 points on NIFTY in last 4 trading days.I personally feel that market will bounce back.

 

[traderwiz]

Hi Rajesh,

Assume that Current Signal is LONG (support is : 4300, Resistance : 4400)
We can enter two ways.

First one is near SUPPORT. If market trades around 4320, you can enter LONG with SL as 4300 if market goes below 4300, than you will simply reverse position and go SHORT & you are into the system.

Second is near RESISTANCE -If market is trading near RESISTANCE than we can try to enter early into next probable SHORT trade by entering SHORT just below resistance. In this example if maret is trading say, 4380 than we can go SHORT with SL 4400. if SL is hit, than we just exit SHORT position but will not go LONG. If market reverses without hitting RESISTANCE & gives Sell signal, than this will be very good trade as we have entered quite early into the SHORT trade & if not, we will end-up with 20 points losses.

Both above methods are low risk methods. We can also apply both the methods intraday to change position early by risking say 20 points.
20 points is just an example, you can choose whatever points as per your risk appetite.

If you still have any doubts, pl let me know.

Vinod

Thanks Vinodji. Just one more clarification. Based on my limited reading and understating of your methods and techniques, I remember reading some where here that at any one point in time, we are either long or short. The following query is based on our explanation given yesterday...

Scenario 1 near support: If support is broken, then we reverse. This is clear.

Scenario 2 near resistance: You had mentioned "if SL is hit, than we just exit SHORT position but will not go LONG". Can you explain this? Not sure if u have already explained this in the past.

At any one point in time, aren't we either constantly Long or Short? More specifically, why aren't we going Long when or if resistance were to be broken? Is this because your signal for the day was short and that we are not supposed to go Long? Or Are there any additional rules that I am missing or not aware of?

Thanks again

Rajesh

 

[nadodav]

Thanks Vinodji. Just one more clarification....

Scenario 1 near support: If support is broken, then we reverse. This is clear.

Scenario 2 near resistance: You had mentioned "if SL is hit, than we just exit SHORT position but will not go LONG". Can you explain this? Not sure if u have already explained this in the past.

Surely we can go LONG, if we enter early part of move. If you enter late i.e. after say 4-5 days of move, than there may be high chances that you will enter LONG near top of the move and market may reverse after that. so to avoid this, it is better to test 2-3 trades with small SL to see whether market reverses or not.

At any one point in time, aren't we either constantly Long or Short? More specifically, why aren't we going Long when or if resistance were to be broken? Is this because your signal for the day was short and that we are not supposed to go Long? Or Are there any additional rules that I am missing or not aware of?

The above is just to enter in right direction first time, once you are in, we will always be in trade.

I hope, this cleares your doubts. if not, pl let me know.

Vinod

 

[nadodav]

NIFTY FUTURE For June 25,

Current position : SHORT (at 4515 on 19/06/2008)

Nifty Fut Closed at : 4171.95

Profit/Loss in current trade : +343.05 (as per last closing price)
Net Profit/Loss since thread started : +1996.05 (1653.00+343.05)

Support : 4153
Resistance : 4277

Hold SHORT position with SL 4277. If trades above 4277, exit SHORT & go LONG with SL 4153.

Happy Trading.

Vinod

 

[Muktha]

Dear Vinod

I have been observing your system for last two months and feel you are doing a great job in giving the levels for Nifty futures trading. As I am new to Futures market, I have some doubts w.r.t. expiry of the futures contract. Consider that I have sold 1 lot Nifty futures of current month (Jun.08 series) at 4515 couple of days back and still holding the short position. What happens to my short position if I do not square off the position on expiry day (26th Jun.08)? As per my understanding, the Exchange will automatically square off all the open position (either short or long) on expiry date on that day’s settlement price, i.e. cash market closing rate. Suppose if Nifty spot closes at say 4215 on 26th Jun.08 and the difference, i.e. 4515 - 4215 = 300 points will get credited to my account or I need to compulsorily close my short position by buying 1 lot Nifty futures of Jun series on or before the expiry?

Kindly explain the implications of not closing the future position (short or long) on expiry day.

Thanks in advance

 

[columbus]

Dear Vinod

I have been observing your system for last two months and feel you are doing a great job in giving the levels for Nifty futures trading. As I am new to Futures market, I have some doubts w.r.t. expiry of the futures contract. Consider that I have sold 1 lot Nifty futures of current month (Jun.08 series) at 4515 couple of days back and still holding the short position. What happens to my short position if I do not square off the position on expiry day (26th Jun.08)? As per my understanding, the Exchange will automatically square off all the open position (either short or long) on expiry date on that days settlement price, i.e. cash market closing rate. Suppose if Nifty spot closes at say 4215 on 26th Jun.08 and the difference, i.e. 4515 - 4215 = 300 points will get credited to my account or I need to compulsorily close my short position by buying 1 lot Nifty futures of Jun series on or before the expiry?

Kindly explain the implications of not closing the future position (short or long) on expiry day.

Thanks in advance

Your query has been answered in another thread already(Mini Nifty futures). Please refer to it.In case of OPTIONS what you said is correct.But in case of FUTURES you need to square off.

More over ,there is a difference between sell/buy and squareoff.In some cases though your intention is to close the position ,they will be taken as a FRESH orders instead off squaring off.Please call your broker and clarify from him ,how to close an OPEN position.

With some online brokerage houses , they display all OPEN positions and you need to PRESS the "square off" button against them, eventhough it amounts to either BUY/SELL futures depending on your position.

 

[nadodav]

Dear Muktha / columbus

Final settlement is automatic for open positions in futures as well as options. So if you do not square-off your futures position on expiry day, than all your open positions will be automatically settled at final settlement price of underlying i.e. for Nifty, closing price of index on expiry day & respective profit/loss amount will be credited/debited on your account.


Vinod

 

[rohangawale]

if we want to carry the same position for next mth also, then how we can do that????

 

[sharmaaashish]

Dear Vinod

I have been observing your system for last two months and feel you are doing a great job in giving the levels for Nifty futures trading. As I am new to Futures market, I have some doubts w.r.t. expiry of the futures contract. Consider that I have sold 1 lot Nifty futures of current month (Jun.08 series) at 4515 couple of days back and still holding the short position. What happens to my short position if I do not square off the position on expiry day (26th Jun.08)? As per my understanding, the Exchange will automatically square off all the open position (either short or long) on expiry date on that days settlement price, i.e. cash market closing rate. Suppose if Nifty spot closes at say 4215 on 26th Jun.08 and the difference, i.e. 4515 - 4215 = 300 points will get credited to my account or I need to compulsorily close my short position by buying 1 lot Nifty futures of Jun series on or before the expiry?

Kindly explain the implications of not closing the future position (short or long) on expiry day.

Thanks in advance

Please don't mind but don't you think this type of questions must be asked from ur broker instead of vinod.

Altough he always tries his best to reply question but those questions must be either related to technical or related to support and resistance levels.

Please don't mind but a wise man must be kept free for wise questions