This is to show you how I take trades in Banknifty. I analyse banknifty futures (bnf) but take trade in slightly OTM option
I follow a strategy which mainly consist of price action. I use indicators just for confirmation. The visuals help.
Based on my experience with technical analysis (TA)-
1. Try to understand structure of the market. Levels and Decision points(DP) are marked
2. Try to identify footprints of institutions. This is done by analysing open(gaps, drives), reading price action bar by bar, price reactions to levels & DP. Creation of intraday DP points.
3. Probable type of day, range or trend. This is most difficult because for any person looking at charts, price moves up or down or in a range, for a traders the probabilities of movements are high.
4. With time and experience, I have identified setups to take trade. Once I see a setup I take a trade. Setups give me a low risk entry.
5. Outcome of a trade setup can be positive or negative. It’s more important for me to focus on the negative side. Once a trade is taken that’s the only thing I can control. Hence SL are strictly followed.
6. Post trades are taken, trade management is next step.
7. Entries are based on setups and exits are based on market structure and experience.
8. I usually avoid the trade session at open.
Some truth about trades-
1. I miss a lot of trades including trend trades.
2. Trades run in my direction after I cover.
3. My SL hits and trades run in my direction
4. I don’t chase trades. Runaway setups are a regular miss.
5. Very few trades are directly taken at levels. I wait for confirmation.
Most of you will be watching my trades post market hours. Your analysis of my trades will mostly be hindsight analysis, unless you are an active banknifty trader and have a strategy which works. When trades are taken, I take a leap of faith into uncertainty, which as per my analysis has a higher probability to run in my direction at trading time.
Few may be traders in the market and probably would relate better to my trade setups.