f&o Archives - Chart Trader

Plan your Trade & Trade your Plan

Plan your Trade and Trade your Plan – BOSCHLTD FEB FUT Contract made this statement true!

Recently I wrote an article in the Chart Review section of my website. There I mentioned the 3 most important aspects of trading and investing. If I repeat, those were Risk, Reward and Probability i.e. RRP. I also did mention that why those aspects are significant in planning your trade. If you had gone through the detailed write-up, you would’ve come to know the difference between winning trade and losing one.

There is a thin line between your success and failure. You need to identify the factors that may impact your performance on screen. I mean you need to have an edge, another important aspect in trading. Because there are too many traders and investors who are looking to be successful just like you. There is someone on the opposite side of your trade who wants to take your money. You must know before making a trading decision that who is seating on the other side of a trade, a Novice or a Professional. After all, trading is a transfer of accounts from the person who doesn’t have an edge to the one who has.

So, how can you come to know that whether he is Novice or Professional? This is something you need to pay attention to. You can easily find them on a price chart. Novice trader qualities include irrational behavior, feels panic while pushing Buy/Sell button, impatient, unable to handle emotions, and most importantly he buys after a period of buying and vice versa. Did you get that? And once you find such type of trader, you must act the opposite of him and quickly too. Because if you miss this Novice, you would miss the trade.

The example (BOSCHLTD FEB FUT Contract) given in Chart Review section depicts this act. This was a nice setup trade in terms of the Risk to Reward ratio. We found the novice traders out there on a price chart and bought the contract when it was presented to us by them. A stop-loss was set and we waited for our Target. Though we achieved our Target the next day, we were confident that a much bigger ratio could be achieved in this trade. We waited for 2 more trading sessions for the price to move higher as the bigger picture Supply was spotted by us. Our trading set-up and patience had paid up and we reached the bigger target within 2 more trading sessions.

Below is the Chart.
Target achieved by following trading plan

See, as URL of this article stated, if you plan your trade and trade your plan precisely and professionally, you could achieve the financial reward much sooner than expected. I have forecast a much prominent financial reward for me on this wonderful trading / investing journey, now it’s up to you to decide on which side of the trade you want to stand. Novice or Professional?

What is Index Futures in Stock Market?

Live Index Futures

What is an Index? Index also called as Indices consist of a set of multiple stocks. E.g. If we talk about Nifty as an index, it consists of 50 stocks of different companies operating in different sectors. Below the elaboration of the Nifty index.

Nifty
NIFTY 50 Index is understood as the largest single financial product in India, with an ecosystem comprising of exchange-traded funds and options at the NSE in India, and futures and options abroad at the SGX. NIFTY 50 is the world’s most actively traded contract.

List of fifty companies that form a part of the NIFTY 50 Index.

Adani Ports

Asian Paints Ltd 

Axis Bank

Bajaj Auto

Bajaj Finance

Bajaj Finserv

Bharti Airtel

Bharti Infratel

BPCL

Britannia

Cipla

Coal India

Dr Reddys Labs

Eicher Motors

GAIL

Grasim

HCL Tech

HDFC

HDFC Bank

Hero Motocorp

Hindalco

HUL

ICICI Bank

IndusInd Bank

Infosys

IOC

ITC

JSW Steel

Kotak Mahindra

Larsen

M&M

Maruti Suzuki

Nestle

NTPC

ONGC

Power Grid Corp

Reliance

SBI

Sun Pharma

Tata Motors

Tata Steel

TCS

Tech Mahindra

Titan Company

UltraTech Cement

UPL

Vedanta

Wipro

Yes Bank

Zee Entertain

The info mentioned above is about Nifty as an Index, but then what is index futures? It is nothing but a futures contract being traded on the exchange. It is traded in a lot. Nifty futures index consists of 75 quantity. There are also other index exist in the market such as Bank Nifty (banking stocks), Nifty Metal, Nifty Infra, Nifty IT etc.

There are other Indices all over the world. These include Dow Jones, Nasdaq, S&P 500, Nikkei, HangSeng, etc.

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