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

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