Level of understanding required: Intermediate (at least 6 months into trading)
Fig 1 - 15 Minute chart of the Bank Nifty
Pre-Market
The index of Bank Nifty has recently broken the downward pattern and there is a likelihood of an uptrend. However, it is a little early to tell. My plan was to take a 50 points on any side of this index. To execute this, I plan to take a PE or CE sell position and take 10 points on premium.
Trade: Successful
I noticed a falling wedge pattern on the 15 minute chart and found it to be interesting. Typically with this pattern, one could see an uptrend somewhere. The market was consolidating on a trend line.
Just as anticipated, I took a trade (shorted PE) on the trend line. The market showed a reversal somewhat immediately thereafter.
Trade Entry and Exit Points on the trade panel
Conclusion: I took my trade and my stop loss was 5 points away (my target was 10 points at 1:2 risk reward ratio). I trailed stop loss every 5 points as it went up. Finally, I achieved to exit with 27 points on this trade.
The falling wedge pattern worked well today as per my anticipation.
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