Classic Example of Using Gann Nos for Option Trading!

I am posting here a today's trade in option where use of Gann numbers in both Bank Nifty levels and Option price gave excellent trade!

The various Gann Nos (4/5 digit) in between 3 digit Gann nos of 20400 & 21100 are (20478-20480)-20591-(20705-20710)-20819-(20933-20940)-21046

Yesterday Bank Nifty bounced back from 20480 (Low was 20472) and faced resistance at 20591 and then moved up to 20700. Today morning it reversed form 20700/20710 level and made low of 20619 and then moved up again. I was waiting for Bank Nifty to break 20710 for target of 20819/20940. When Bank Nifty broke 20710, it moved very quickly to 20900 just 40 points short of 20940.

Here is chart of bank Nifty 5 min chart with Gann Levels.

When Bank Nifty broke 20710, I bought 21000 CE for Rs 13. This option has 45 degree movement. It moves from 1-3-7-13-21-31-43-57 i.e. Gann series for 45 degree.

I put Stop Loss (SL) as Rs 10 just Re 1 below 11, lower Gann No from 180 degree series. When price reached next level I trail my stop loss following same method of putting it Re 1 below lower number from 180 degree series (for level 21, TSL 18 and so on.). The TSL hit only when option price reversed from 43 level and hit 39.

For risk of Rs 3, net gain was 26. One can see how nicely option price move from one level to next level during impulsive move.

This is excellent example of how using Gann Nos on Index (Bank Nifty) and Option price one can get excellent trade in option trading. For Bank Nifty move of just 200 points I got 200% return on capital with risk of 25%(Risk Reward ratio of 1:8).

Comments

VIX Analysis

The daily VIX chart shows the formation of Doji candles at the bottom and reversal. The daily RSI crossed the previous resistance level of 40. The MACD signal gave bullish crossover suggesting bullish move in VIX. So the daily chart shows the possibility of VIX moving towards 28 levels in the coming days. The weekly chart shows the formation of wedge and reversal from the bottom. VIX may move towards the upper wedge line @ 29-30. So VIX suggesting the bearish mood of the market and hence the high possibility of fall in Nifty-50 and Banknifty in the coming days/weeks. VIX Gann Box: The daily Gann Box shows a reversal from the mid-zone of time factor points. The next time factor date is Jul-21. So will VIX continue to move high till Jul-21 or it will reverse from angle point? Wait and watch. Using VIX to spot Intraday Reversal on Indices: VIX is a very useful indicator to spot reversal during day trade. If the price of an index moves up and @ resistance zone watch values of VIX. If VIX s...

Intraday Index Options Trading by Degree Gann Number System ! E-book available on Amazon - Download FREE!

For the next 3-days, E-book is available FREE for download! Take advantage of this promotion. Requesting to write a review on amazon. Download link:- https:// amazon.in/dp/B09DHFS5KJ

BankNifty Update For Jul-09,2020 - Weekly Expiry

Banknifty opened Gap up @ 22700 and then achieved all our bullish targets of 23900/23000. But the upmove was very choppy and looked like terminating pattern and was not easy to trade. So I did not take a trade on the upside. My observation was Banknifty good up (250-300 points) while Nifty was not at all moving up and was just 10-15 points up and VIX was increasing. That was a signal that there is a high probability of reversal. (I twitted this around 12.30 pm). Banknifty continued its upmove and VIX was not falling, so I was sure that reversal is on the card from the strong resistance zone of 23900-23000/50. In yesterday's post, I mentioned about daily RSI @ resistance. That was another reason I was expecting a high probability of fall after it moved higher levels to come to at least yesterday's close levels or below. I got down-trade from almost 23000 to 22700 (got out earlier as it was intraday and not much time left though I was expecting at least 22600. It gave a much lowe...

MoneyNaad

Search This Blog