HOW TO TRADE NIFTY/BANKNIFTY USING SUPERTREND

3. März 2021

• Identify the underlying trend of the market on a higher time frame.
  
  
• After identifying the underlying trend, you will have a bias. For example, In a Bullish market, always look for a long trade. Never short a Bullish market. Likewise, in a Bearish market, always look for a short trade.
  
  
• For opening a trade, use an hourly time frame. Other time frames work too, but if you are an amateur, the hourly time frame will provide less noisy signals.
  
  
• BUY on the signal(Blue arrow in this case).
  
  
• Use 8-EMA as trailing stop loss.
  
  
• Place Stop Loss just below the close of the previous candle. If the Previous candle is too small then, place the SL below the close of the Previous-to-Previous candle.
  
  
• SELL(Close Longs) if >50% body of the candle closes below the 8-EMA.
  
  
• You can also use a fixed Risk-Reward ratio if you do not want to use a trailing stop loss.
  
  
• The same principles can be followed to open SHORTS. Hence, I am not writing them again.
  
  
• This strategy can be applied to Banknifty or other equities/commodities etc.
  
  
• You can backtest this strategy and paper trade for some time.
  
  
• Always remember there is no holy grail in trading. It's a game of probability.
  

Let me know your views in the comments.

P.S: This is NOT investment advice. This chart is meant for learning purposes only. This is my personal journal. Invest your capital at your own risk.