NIFTY FUT handle volatility with money management and agile trading

NIFTY FUTURE- Update for 2^nd August

NIFTY Fut had a terrific volatile day where we saw a gap up move and at the same time it cracking to break across yesterday’s low and barely managing to close above the critical 5755 trading levels.

One more interesting thing to observe that markets failed to make a sustained move above 5835-40 trading levels. Regular readers of the blog will recall that this was a critical levels that we have discussed many a times.

An important thing to observe is that markets failed to close above the 5770 trading levels.

For the next session the levels of 5770-5755 will be extremely critical to watch out for and any break of this level can resume another leg of downside.

On the upside markets need to pull back above 5800 to show any signs of strength else all rise will be challenged.

Coming back to the volatility. During volatile times markets range increases, we generally tend to see  this during results season or times when we have a high impact news. A way to handle risk here is vary the lot sizes based on the stops that you see. The stop loss range tends to increase because of increased trading range.  Reducing lots with increasing stop loss is a way to go. This is aptly compensated with increase target ranges as well.

Also one should be agile enough to switch positions if the trading range demands so A classic case was today when we saw a positive sentiment for first couple of hours and then the trend reverse significantly.

Trading levels for the day:

POWERTRADE BEARS LAST STAND POINT OF THE DAY ----- 5800-05 sustaining above which it will target 5830,5860
POWERTRADE TREND DECIDER OF THE DAY ------- 5755-60
POWERTRADE BULLS LAST STAND POINT OF THE DAY------- 5730
Breakdown and sustaining below POWERTRADE BULLS LAST STAND POINT OF THE DAY will open target for support of ---- 5700,5665