The strategy involves trading based on the breakout of the 9:45 AM candle on the Nifty 50 index chart, using a 5-minute time frame. First, the strategy focuses on identifying the breakout direction by monitoring the chart and setting up alerts for when a 90-point breakout occurs. For an upward breakout, it suggests buying call options, while for a downward breakout, buying put options is advised. Historical data analysis and backtesting are crucial for validating the strategy's effectiveness.
In executing the buy signal, the strategy emphasizes setting a target of 25 points and a stop loss at 10 points below the purchase price. This involves precise control through limit orders and active trade management based on real-time market conditions. Adjustments are made according to market volatility, and trade performance is evaluated daily.
In case of a downside breakout, the strategy involves similar actions but focuses on put options. Maintaining detailed trade logs and reviewing market indicators ensure that the strategy remains effective. Refinement of the strategy is carried out based on ongoing market feedback and economic events.
The strategies
⛳️ Strategy 1: Identify the breakout direction
- Monitor the Nifty 50 index chart on a 5-minute time frame
- Identify the 9:45 AM candle on the chart
- Determine if the candle breaks out 90 points above its opening
- Consider the breakout as an indication to buy call options
- Set up chart alerts to notify you in case a breakout occurs
- Keep a record of the opening and closing of the 9:45 AM candle
- Define criteria for a valid breakout (e.g., sustained movement for a specific time)
- Analyse past data to confirm the reliability of the strategy
- Document entry and exit times for trades for analysis
- Backtest the breakout strategy using historical data
⛳️ Strategy 2: Execute the buy signal
- Upon confirming the breakout, place a buy order for at-the-money call options
- Ensure the target is set to gain 25 points
- Set a stop loss limit at 10 points below the purchase price
- Use a limit order for precise control over trade execution
- Monitor real-time market conditions to manage the trade actively
- Record the position size based on your risk management strategy
- Keep abreast of financial news that may impact the market
- Set up alerts for price levels that align with the target and stop loss
- Assess market volatility to adjust the strategy if necessary
- Evaluate the trade performance at the end of each day
⛳️ Strategy 3: React to the opposite breakout scenario
- Identify a 90 point breakout below the 9:45 AM candle
- Place a buy order for at-the-money put options in case of a downside breakout
- Set the profit target for 25 points on the downside
- Implement a stop loss at 10 points above the entry price
- Consider using a trailing stop loss to maximize gains
- Keep a detailed log of your trades for analysis
- Review market indicators to confirm the validity of the downside breakout
- Conduct regular reviews of the strategy's effectiveness
- Stay informed of economic events that could influence market trends
- Refine your trading strategy based on trends and market feedback
Bringing accountability to your strategy
It's one thing to have a plan, it's another to stick to it. We hope that the examples above will help you get started with your own strategy, but we also know that it's easy to get lost in the day-to-day effort.
That's why we built Tability: to help you track your progress, keep your team aligned, and make sure you're always moving in the right direction.
Give it a try and see how it can help you bring accountability to your strategy.
