Nifty & Bank Nifty, Technical Levels For Swing Trading, Update - 31 July 2012

Nifty Spot Rates, Technical Trading Levels
Swing : Up
SAR : 5050
Low risk entry : 5140
Target : 5240

Bank Nifty Spot Rates, Technical Trading Levels
Swing : Up
SAR : 10100
Low risk entry : 10260
Target : 10480


  1. Hi AJ,

    As per ur SAR for today it was 5150..Now if you had entered at 5150, you have kept tomorrows SAR as 5050,which means u r keeping 100 pts as SL for this trade..and even if this develops at some ratio, for this trade to breakeven at 5150, it will take many days,and what will be the profit %...Pl clarify...


  2. Hi Suresh,
    I received a mail with similar query. Hope it answer your question too. Mail and my reply below.
    Mail :

    I am a regular reader of your post on Nifty & bank nifty. It is very
    useful information . But I have a basic query on its levels.

    There is a wide gap between the Sar & low risk entry.

    Example-Bank nifty-----Swing--UP ---- SAR----10100 ( spot )---Low
    risk entry----10260--Target 10480.

    The difference between SAR & low risk entry is 160 points. It means
    loss of Rs 4000 for one unit of bank nifty.

    Is it possible to enter near SAR with a stick stop loss. Also please
    give data on future Bank Nifty because spot can not be traded as u

    Pl do clarify
    Thanks & regards
    Reply :

    Because these are swing trading levels we need to keep wide stops, entry and exit levels.

    Agree 4000 Rs loss is too much for a trader with low capital, lets say Rs50000. On the other hand, Rs 4000 might be acceptable to someone with Rs 300000 as trading capital. So 160 points(4000 rs) is not the problem, it is the risk with respect to trading capital which creates a problem and the kind of leverage we take in futures trading. Even I don't trade Bank Nifty for the same reason.

    We can trade with "strict stop loss" but with that approach you will have a problem of whipsaws. In the long run I guess you will end up with similar results. So it's up to a trader, one can either go for a system with relatively bigger draw-down or higher number of whipsaws. You can't get the best of both the worlds. Big draw-down can be solved using money management.

    Check this link -

    It is about risking a fixed number of rupees per trade. But again it tough to implement with fixed lot sized trading and limited capital (like banknifty futures).

    In nifty if you trade just SAR trades level it will give you approximately 2000 points in an year. That may seem too less. One can say I will target 10 points per day and perform better than a swing system. That's up to a trader.

    If someone entered at SAR 10400 next day stop was at 10055 that comes to a difference of 345 points. In swing trading you will have wider stops and wider targets. If you want to have tight stops you will have to accept tight targets as well (i.e you will need to do day trading)

    I wanted a low stress system, the one that doesn't require day long sitting in front of computer. This system is the result of that underlying thought. Once you have a profitable system, one can theoretically make infinite amount of money by "loading up the lots" :)

    Regarding futures levels - I provided futures level to start with, switched to spot level as it was convenient for me and it is helpful for me to do backtesting. I do backtesting based on spot level that helps in optimizing the trading system. That's why I am giving spot levels as you can't get reliable data for futures for backtesting.

    Thanks and all the best.