You've likely heard the trading wisdom: "Plan your Trade and Trade your Plan." This principle is crucial to your overall success as a trader.
To effectively prepare for Nifty trades executed at C1 @ 10AM as per our Trading System, you should start focussing on the price action by 9:45AM. However, the actual preparation starts in the off market hours (overnight or before 9 AM) and should not take more than 15 minutes.
Preparation for the trade coincides with Trade Selection that has been dealt with in a later section in detail (Refer Navigation Guide). In this post, we would mention the broad steps briefly.
Steps for Trade Preparation
Before 9AM
Determine Long-Term Trends: Analyse the weekly and daily trends of Nifty and US indices (More on US Indices in the section on Trade Selection). It's essential to align your trades with the broader market trend.
Identify Support and Resistance: On the 2H and 4H charts, identify key levels such as Horizontals, Pivots, Congestion areas, and Gaps.
At 9:45AM - C1
Check for Identifiable Setups: Review the 1H chart of Nifty Futures to identify any tradable setup that is forming on C1. If no setup is evident, wait for C4. Only trade setups that are well formed, meet all conditions and are easily recognizable.
Tabulate Tradable Setups: Once you identify a setup that is forming, record it and do the trade selection drill. Refer to the section on Trade Selection for a detailed explanation of the drill along with practical examples.
Calculate Maximum Exposure and Maximum Risk: Before 10AM, finalize the table with Stop Loss, Profit Targets, and the number of lots. Calculate the Total Risk, equivalent to the Maximum Loss if the Stop Loss is hit. Ensure this risk is tolerable. Adjust the number of lots or forego the trade if necessary.
At 1PM - C4 and 2 PM - C5
New trade to be taken only if there is no existing trade. Repeat the same drill mentioned above for the above windows.
Key Takeaways
Before C1, C4, or C5 concludes, ensure your Trade Preparation is complete. This includes thorough Trade Selection and Risk Control.
If this seems daunting, don't worry. It may take longer initially, but with practice and experience, you will streamline your preparation process. In subsequent sections on Strategy and Trade Selection, we will explore the Risk Management and Trade Selection processes, clarifying the "what," "why," and "how."
Stay disciplined, follow the plan, and success will follow. Click on "Next Post" to move to Trade Execution.
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