Bank nifty trading in gap up opening – When there is any big event or and big news, then after the news breaks , next day generally banknifty opens gapup or gapdown, and in excitement most of the trader jump in bank nifty without knowing how to trade a gapup or gapdown market. In this post I will discuss about how to trade bank nifty when it opens gapup.
Basic rules to trade bank nifty with gap up opening
In the premarket session you can track where the bank nifty setteled and opening at 9:15. The basic rule is you should wait at least first 5 min candle that bank nifty sustain first 5 min candle or not. Some trader use first 15 min candle for more confirmation.
When Bank nifty sustain first 15 min candle
If the banknifty sustain first 15 min candle and does go below this level then probably the chances are high that bank nifty will go in up direction. And your entry should be above the first 5 min or 15 min candle which you follow , but you must check there should not be any touch resistance level just above this candle.
When Bank nifty does not sustain first 15 min candle
If a gapup opening bank nifty does not sustain its first 15 min candle, and close below this candle then you can expect a fall in bank nifty . Then bank nifty will try to fill its gap, and you can check the previous day closing level , there at that level, probably bank nifty will try to take support and from there you can expect a buying in bank nifty if the trend of bank nifty is positive in daily chart.
Gap up more than 300 points
Some time after a big news bank nifty open more than 300 points generally 400 to 500 points gapup, and then you should not enter into market suddenly , there at top if bank nifty makes any shooting start candle or bearish candle then you can think to short the bank nifty but your stoploss should be very strict and about the shooting start candle.
If you catch the move of this candle then with in few minutes you will get a good profit, but to catch that move you should be very quick and fast and your decision should be clear.
Nirmal is a NISM Certified Derivative Trader & the Founder of InvestandEarn.net (Financial Blog). He entered the world of Equity research to explore his interests in financial markets having 5+ Years of Experience in Share Market Trading & Investing. Nirmal frequently writes about Share Market Trading & Investment and publishes his personal view on the market. Drop him a mail at nirmal.jaysval@investandearn.net.
