In scalping, using the 10-minute candlestick chart is crucial, particularly in Bank Nifty due to its volatility and higher accuracy in backtesting. We wait until 11 AM to start trading as the indicators need time to develop. For the 10-minute intraday chart, two essential indicators are used: VWAP (Volume Weighted Average Price) and another indicator of your choice.
VWAP serves as a significant reference point for intraday traders, indicating the average price weighted by trading volume. It helps identify potential support and resistance levels and can guide entry and exit points.
The other indicator can vary based on individual preferences. Popular choices include moving averages, RSI (Relative Strength Index), or MACD (Moving Average Convergence Divergence).
By combining these indicators and understanding their interactions with price movements, traders can identify potential entry and exit points for quick profit-taking within short holding periods.
In scalping with a 10-minute time frame, we incorporate the Exponential Moving Average (EMA) with a period of 6. The choice of this period is based on the logic of weekly expiry in the market. Since the market has a weekly expiry of 5 trading sessions, using a longer period may not yield the best accuracy.
During backtesting, we evaluated various periods commonly used, such as 5, 7, 10, and 21. The 6-period EMA demonstrated the highest accuracy, especially in Bank Nifty, considering the weekly expiry.
When using a 10-minute time frame, using a 6-period EMA covers an average of one hour, specifically from 9:15 AM to 10:15 AM. This hour is crucial as it encompasses the initial trading decisions and sets the tone for further market movement.
By using the 6-period EMA on a 10-minute time frame, we align our trading strategy with the influential opening hour, enabling us to make informed trading decisions.
We employ two methods for trend identification. Firstly, we analyze the relationship between the Volume Weighted Average Price (VWAP) and the 6-period Exponential Moving Average (EMA). If they move together, we avoid trading as there is no clear trend. However, when there is a crossover, indicating a change in direction, we take notice.
Secondly, we use the 5-minute Put-Call Ratio (PCR) data to gauge market sentiment. We observe how the PCR data changes over time, looking for trends or shifts in strength. A rising PCR suggests growing bullish sentiment, while a declining PCR may indicate bearishness.
To illustrate this, we refer to AutoTrendr’s 5-minute PCR data. For example, if the PCR data shows increasing strength after a period of sideways movement, it signals a potential uptrend. When we combine this with the VWAP and EMA analysis, we gain confirmation of the positive market trend.
As a scalper, when the price nears the 6-period EMA on a 10-minute candle, we consider it a trading opportunity. With the PCR data confirming the trend, we can confidently execute buy trades.
After the price comes near the Exponential Moving Average (EMA), we look for rejection from that level. Once the rejection occurs, we wait for confirmation from the next candle. If the subsequent 10-minute candle breaks the high of the rejection candle, we take the trade. The entry can be either in the call option or the future contract.
The waiting time for this trade is limited to two candles, including the rejection candle. In case of a long trade, the stop loss is placed at the low of the rejection candle. Once the entry is taken, traders can book profits on the closing of the trade when the price reaches a desirable target.
As an example, if the entry is taken at around 37,820 and the high reaches 37,891, traders can book a profit of approximately 40-70 points, depending on the exact entry and exit points.
This approach allows scalpers to capture quick profits within short timeframes, leveraging the market trends identified through the VWAP, 6-period EMA, and 5-minute PCR data analysis. Remember to manage risk prudently and practice this strategy to become proficient in scalping.
In scalping, after entering a trade, we aim to book profits in just two candles. However, there is room for flexibility, especially when manually observing the charts. If the third candle shows a breakout and the Put-Call Ratio (PCR) data supports the trade, traders may choose to hold the position for a little longer and adjust profit targets accordingly.
The typical scalping timeframe ranges from 20 to 27 minutes, depending on the candle’s closing time and market conditions. As a scalper, it’s essential to be adaptable and make judgment calls based on real-time chart analysis and PCR data.
Beyond the scalping window, there may be attractive opportunities for BTST (Buy Today, Sell Tomorrow) trades. The flow indicator in AutoTrendr helps identify such opportunities, especially if a significant quantity of around 10 lakhs is involved. For BTST trades, we rely on data rather than charts, as the market data indicator provides the necessary insights for making informed BTST decisions.
BTST (Buy Today, Sell Tomorrow) is indeed an interesting concept for traders looking to benefit from market gaps during the overnight session. With the market experiencing significant gains and fluctuations, BTST can offer attractive opportunities to capture profitable trades.
In scalping, the choice of the Exponential Moving Average (EMA) period is critical for getting timely entry signals. Using a shorter EMA period, such as 6, ensures that traders do not miss potential trading opportunities as the price interacts with the EMA.
Monitoring the Put-Call Ratio (PCR) data in real-time is essential for both scalping and BTST trades. An incremental trend in PCR strength indicates a higher probability of favorable market moves, providing traders with additional confidence in their trades.
While the scalping strategy can be applied to Nifty, traders may find better opportunities and higher success rates in bank nifty due to its volatility. For traders interested in nifty trading, SMC Global offers a premium Telegram channel with index trading calls provided by CA Nitin Murarka. This subscription includes calls for both nifty and bank nifty, complete with target and stop loss levels. By joining this service, traders can access valuable insights and potentially enhance their trading performance in the nifty market.
Additionally, SMC Global provides an attractive Independence Day scheme, offering a three-month subscription at a competitive price of Rs. 3,500. With this subscription, traders can access expert trading calls and receive the AutoTrendr tool for free, further empowering their BTST trades.
Nitin Ji’s trading expertise and insightful calls have made him a well-known figure in the trading community. His commitment to educating traders and sharing valuable strategies is evident in the success of his Telegram group and the popularity of AutoTrendr software.
In today’s example, Nitin Ji provided a call option for Nifty with a target of Rs. 180 and a stop-loss at Rs. 70. Supported by data analysis, he foresaw the potential for Nifty to rise towards 17,500. The call option was taken at Rs. 116, and the target was met at Rs. 180, resulting in a profitable trade of 42 points per lot.
Nitin Ji’s presence on prominent financial channels like Zee Business and CNBC Awaaz has further elevated his reputation as a knowledgeable analyst and a trusted source for trading insights.
To connect with Nitin Ji and access his calls and analysis, traders can join his Telegram group at SMC Global. The group offers real-time trades, detailed logic behind the calls, and discussions with SMC’s registered analysts.
As a seasoned trader and mentor, Nitin Ji continues to empower traders with valuable information and tools like AutoTrendr software, which is made available for free to those who join his Telegram group.
His dedication to sharing knowledge and guiding traders towards profitable trades makes him a valuable resource for traders looking to enhance their trading skills and achieve success in the markets.
Nitin Ji’s show “Nifty Ke Nisane Baaj” is highly valued by viewers because it provides detailed insights into the Nifty market and explains the reasoning behind his trading strategies. While he appears on TV for short segments, through our platform, traders can learn from him in-depth and understand the logic behind his trading decisions.
Nitin Ji’s commitment to sharing knowledge and experiences with traders is commendable, and it has been beneficial for many. He regularly reads books to expand his knowledge and stay updated with the latest market trends and strategies. He aims to read around 50-60 pages daily, sometimes even more on weekends.
Books are an invaluable resource for learning and gaining expertise in trading. Nitin Ji recommends books like “Trend Following” and others, which can cost around Rs. 6,000 to Rs. 7,000 in Indian currency. These books are investments in learning and can provide knowledge worth lakhs and even crores of rupees over the years.
While there is a vast amount of information available for free on platforms like YouTube, it’s essential to recognize the value of curated, detailed knowledge found in books. Investing in books allows traders to delve deeper into specific topics and learn from experienced authors who have dedicated years of research and expertise to their work.
Ultimately, continuous learning from books, combined with practical experience and guidance from experienced traders like Nitin Ji, can significantly enhance one’s trading skills and lead to success in the markets.
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