If you have just come to the stock market, your main question will be how to trade Nifty 50 intraday futures. You will get the answers related to nifty intraday futures trading strategy with chart examples in this post and if possible, read it carefully.
Before trading in nifty futures, you need to know about intraday terms, also known as nifty day trading. Intraday trade means squaring off your positions on the same day (exiting before the broker mentions the time). In simple words, we buy and sell both on the same day.
You cannot carry over your intraday positions to the next day. Although some brokers offer the option to convert trades into CNC, it is available only in certain segments.
You can carry forward futures, stock, or options in a CNC order for the next day. CNC is a completely different topic, which I will cover in another blog. So keep visiting for fresh and valuable content to enhance your nifty futures trading basics to the next level.
There are many nifty futures trading strategies available on google, but you don’t have to follow all the strategies. There are some key points that you need to learn on your nifty trading charts before putting any orders.
Until the time you do not know how to read the charts, you should practice paper trading. I will create a detailed blog on nifty futures paper trading in the coming weeks.
Let’s learn how to trade Nifty intraday futures
To trade in nifty intraday futures, you need a solid nifty trade setup and keep in mind the following key points. These will surely help you to become a good trader.
Here is the nifty futures trading formula with examples:-
- Market Outlook
- Global Sentiments
- Nifty Opening Range
- Open & Low Price (on 5 min Chart)
- Time Frame
- Previous Day Support & Resistance Zone
- Trading Formations (Very Important)
- Intraday Support & Resistance Points on Trendline
- Previous Day Swing High & Swing Low
- Session Note Down Trades
- Mark Today Swing High & Swing Low
- Calculate Risk & Reward
- RSI (To be Safe Side)
- Don’t Take Early Trades (If you are a newbie)
- Try To Look For Patterns
- Bigger Time Frame
- Don’t OverThink
- See Chart As Big Players
- Market Sentiments
- Correlation With Banknifty
- Risk Management Techniques
If you do nifty intraday futures trading, then it is very important to know the outlook or direction of the market. It is subjective and depends on many factors like economic conditions, geopolitical events, and investor sentiments.
And there are many such tools and techniques by which intraday traders or analysts find out the market trend.
Mainly comes in:-
- Fundamental Analysis
- Technical Analysis
- Identify Patterns
See, it is difficult to predict the future results from the past performance of the stock market. As the market pundit says, no one knows how the market will behave, so it is only wise to manage your risk.
Global Sentiments refer to the collective mood of the world’s top stock markets. These sentiments are influenced by a variety of factors, such as:
- Economic Condition
- Political Development
- Social Trends
- Culture Events
Global sentiments can affect your trades as an investor. It does not have much impact if you are a nifty intraday futures trader. Intraday trade has to be closed within the same day.
Global sentiments are considered for short-term trading. A long-term or positional trader must adjust his strategies according to the market sentiments.
Nifty Opening Range:
It is a very important parameter that will improve your trading style. You should consider it completely. Now, if we talk about the Nifty opening range, you can do it anytime.
If you want to do it intraday, you should prefer a 5-minute or 15 min time frame chart. If you want to do swing trade, you can prefer a 1 Hr time chart. Swing trade means buying or selling on CNC orders.
You carry the position of Futures until the expiry. Remember to square off before the expiry date of current nifty futures; otherwise, you will get in trouble.
You can understand nifty intraday levels with the following chart examples:-
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The opening range is shown in the 5th time frame, as shown in the image. Range means how much nifty futures trading time uses near their current support or resistance levels.
You can also take the help of swing high and swing low to identify the range. Opening range means what Nifty did in the first 15 minutes, and you have to observe on the chart.
Open & Low Price (on 5 min Chart):
The opening price of the nifty futures live index matters a lot, so mark the nifty open price. You can also plot the nifty low price, but it isn’t easy to plot it on the chart.
For this, you have to mark the candle’s closing price or the low price of the previous day’s candle, at which point the low is formed.
For this, you can use Trendline or support resistance. You can improve your trading skills through continuous experience and chart reading.
Through this image, you can understand the marking of nifty open price and low price:-
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Identifying what kind of candlestick pattern is formed on the Nifty opening price is also necessary. Candles of 5 minutes and 15 minutes are suitable for nifty intraday trading.
You can also use a 1-minute or 3-minute time frame, which is risky for a new trader. All this will come to you through continuous practice and experience.
Note:- Rest depends on your trading style and skill. I do not provide or promote tips; I will only guide you.
You can learn by reading my blogs. I share the video of the charts on Instagram, which you can also see there. I will also bring a video on nifty chart reading, and things will become clearer.
The range of time frames is very high in port-centered trading. You have to decide which time frame you do it. Practice daily on whatever time frame your trading is comfortable. Now, if we talk about time frames in technical terms, it is related to the bigger picture.
The trade is calculated based on a few days in the time frame of 1 hour. Similarly, the trade of 2 hours and 4 hours can be confirmed.
But the time frame of 1 day or one week is seen from the point of view of a big swing trade. Now, if you do intraday, 5 minutes or 15 minutes is the best-suited time frame for chart pattern identification and trade execution.
You can understand it with the help of an example of with image:-
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Previous Day Support & Resistance Zone:
Identifying the previous day’s support and resistance on the charts is crucial to enhance trade confirmation. Although you cannot find the exact level, you can mark it with the help of swing points.
You can do this level marking by making a zone because you get an extra advantage in the zone.
You can understand nifty futures support resistance levels with the following chart examples:-
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Trading Formations (Very Important):
To become a successful trader, one should know what kind of trading formations are formed on the charts. For this, you need knowledge, skills, and practice.
The best approach for any Tardar is: –
- Individual Goals
- Risk Tolerance
- Market Knowledge
If we talk about trading formation, then it is important in which time frame, pattern, or formation is formed.
This formation can also be related to candlesticks, support resistance, or any other type of pattern.
Some of the popular trading formations are given in the images below:-
Intraday Support & Resistance Points on Trendline:
There are some technical ways to draw a trendline on the chart, on which I have written a detailed post; you can check it. It would be best if you tried to draw the Trendline according to the direction of the market.
If the market trend is positive, try to find the trendline breakout trades. Don’t force yourself to pull the Trendline and take the wrong trades.
And if the market is in the negative mode for any reason, then find the trades of trendline breakdown.
Session Note Down Trades:
Taking a trade at the right time signifies being an experienced trader. Time session trading means at what time you prefer to trade. As early morning, mid-day, and the session’s second half.
It depends on your practice and skills which time session suits you best. Whatever the session, you should always take the trade only with the confirmation of the pattern.
You must identify a specific session where buying and selling pressure is generated, whether it is a breakout or breakdown.
For example, you have to do the chart analysis of the last week; for this, you can do the time frame of 5 minutes or 15 minutes. After this, mark where maximum breakouts or breakdowns have occurred in each session.
Session means Early morning (between 9:30 AM to 11:30 AM), Mid-day session means (from 11:30 AM to 1:30 PM), and evening session means ( frem 1:30 PM to 3:30 PM )
Mark Today Swing High & Swing Low:
You can mark current swing highs and swing lows to optimize your trades. In technical terms, swing high means the high peak point of the candlestick formed in your preferred time frame.
Swing low refers to the lowest point formed on the candlestick of your preferred time frame. Now, if you choose a time frame of 5 or 15 minutes, your swing high and low points will be at different levels.
The rest depends on you which time frame you choose to trade. An important point here is where the previous day’s swing high and swing low have been formed because the swing points of the previous day act as support and resistance.
Swing points don’t need to work accurately every time. With its help, you can strengthen your technical skills and chart reading. It will help you in taking good trading decisions in difficult times.
See some examples shared below:-
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Calculate Risk & Reward:
It is a key point that a new trader often does not take seriously, and it is one of the most important. Calculate Risk and Rewards is made up of 2 things.
First, risk, and second, reward. Risk calculations mean how much loss you can take in that particular trade. However, your loss or risk should be defined so that I will not take a loss more than my fixed amount.
Managing your risk is the mark of a professional. So be professional and treat trading like a business.
The second point is the reward, the way the risk is managed; in the same way, the reward should also be decided. The reason to decide the reward is not to become greedy; if you become greedy, trading is over for you.
The main reason is that the market can take a sudden pullback, and you lose all your profits in pursuit of higher rewards. Not only this, the profit goes out of hand; on the contrary, the loss must be given to the market.
You should always maintain your risk-reward ratio. It will pause your trading, and you will know when to exit the trade. Discipline is the key to success in trading.
Let us understand the risk-reward better with the help of the pictures given below:-
RSI (To be Safe Side):
I’m not a big fan of indicators. If you are a beginner, you must have used many indicators; they can only play the role of helpers in taking trades. You get more trade confirmation if you use indicators in conjunction with price action.
One indicator I suggest is the (RSI) Relative Strength Index. It helps in telling the trend’s strength, and if you are a new trader, it will be easily understood.
It is very easy to plot it on the chart. I have described how to use it with Trendline in another blog.
Let us understand RSI with the help of the examples given below:-
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Don’t Jump Into Trades Early:
It is the biggest mistake a trader makes, whether a beginner or an experienced trader. You can find out the market’s direction by not taking quick trades.
According to the market’s direction, you can take trades using whatever chart pattern is formed. It all depends on your mindset, as I told you from the beginning. There is a need to develop the mindset that the rest of the things will be right by themselves.
Try To Look For Patterns:
Try to find patterns to make the trade more successful, and patterns can be formed in any time frame. Chart patterns also help you to identify the direction of the market.
Some famous patterns like Head & Shoulders, Flag, Pennant, Trendline Breakout, or Breakdown Triangular can be seen often and are promising. You can get confirmation of your trade by combining these chart patterns with indicators.
Bigger Time Frame:
The trade becomes better if an intraday trader unlocks the chart using a bigger time frame. The time frame of 1 hour is helpful for trading the next day; accordingly, you mark the support resistance or swing points.
Whereas in intraday trade, execution should be according to your 5 minutes candlestick.
Let us understand a bigger time frame with the help of the examples:-
If we talk about mindset, the vision should be clear. Before thinking about profit, you must consider how much the loss will be in this trade; keep this in mind.
If the loss in the trade is more and the profit is being made, then you do not have to take the trade. It is such a point that will change your trading habits.
If you are getting a profit and you are happy at that time and sad at the time of loss, it shows your weak mindset. It is inappropriate to do this; you should take only those trades in which your risk and reward are managed.
Don’t Over Think:
The second point is not to think too much about taking the trade. As I said in the above point, all the thinking is before taking the trade. All the research you have to do or draw nifty futures support resistance levels on the chart is all before taking the trade.
And one important thing I am telling from my personal experience is that during live trading, do not watch videos of other traders.
It will make it difficult for you to make decisions and will manipulate your mind. By doing this, the trade in which you have to make a profit will also turn into a loss. At the time of live trade, the decision should be your own and not someone else’s.
See Chart As Big Players:
If you look at the Nifty chart or any stock chart from the point of view of a big player then your trade success ratio increases.
Big players take care of many things during live trade, including important trend direction, support, resistance, volume, and chart patterns.
For live trading, you must understand the market’s sentiments properly. It helps you to know the trend of the market. The market’s sentiment tells at which points the buying and selling pressure is present.
For example, a bullish market sentiment may indicate that the market is expecting positive news, while a bearish market sentiment may indicate the opposite. There are many ways to understand the sentiment of the market.
Some of which I am talking about here:-
- Trading Volume
- Examine News & Media Coverage
Correlation With Banknifty:
If you trade in nifty futures, you need to see the banknifty future live chart. If both indices move in the same direction, then the confirmation ratio of the trade increases.
It increases your trade success ratio; although it doesn’t need to be the same every time, it is observed in maximum trades.
Risk Management Techniques:
You all have to understand that trading is a very risky profession. Trader’s sentiments dominate here. Big traders say sentiments have no place in the market, and this is true.
Hello Traders, Myself Prashant, doing trading from last 4 years. I’m uploading content from my own experince hope you’ll appericate my efforts. If you have question please leave a comment. Follow @Instagram