Strategy description

Strategy Overview

This intraday momentum trading strategy uses price action and volume-based indicators to trade NIFTY50 and Sensex  options on 1-minute and 2-minute charts.

Traded Instrument

NIFTY50 Options Spot and  Sensex spot Price 

Discipline Note for Algo Trading

1. Initial Paper Trading: Run in paper mode for at least one week. Do not switch to live until results are consistent and satisfactory.
2. Live Deployment Criteria: Deploy live only after stable, positive paper-trading performance.
3. Drawdown Control: Halt live trading immediately if losses exceed 4%. Do not increase multiplier or volume to recover—reassess strategy first.
4. Multiplier Increase Rule: Only increase volume after one full month of satisfactory live performance.
5. General Discipline: No emotional decisions—rely on backtesting and real-time data. Monitor performance and log observations regularly.

Capital Requirements

Minimum capital varies with the ATM spot premium, typically ₹5,000–₹25,000 per lot. Maintain sufficient margin (plus buffer) to avoid shortfall errors.

Timeframe

1. Entry signals generated on 2-minute and 1-minute charts
2. Trading hours: 9:16 AM–3:15 PM IST (all positions closed before market close)

Risk Management

1. All positions squared off before market close to eliminate overnight risk.
2. Built-in stop losses manage small reversals and sharp trend changes.
3. Dynamic exits adapt to live price action and volume signals.

Important Notes

1. Strictly intraday—no overnight positions carried.
2. Adapts to both trending and range-bound markets via combined momentum and volume indicators.

Disclaimer

This strategy is for educational purposes only and does not constitute investment advice. All trading involves risk and past performance does not guarantee future results. External factors such as market volatility, broker execution, connectivity, and platform stability can impact live performance. It is strongly recommended to paper-trade first, maintain additional margin, and monitor the strategy closely. Users are solely responsible for their trading decisions.