Trading Rules (Intraday)

A. Pre-Trade Preparation

Before entering the market, preparation is key.

1. Review market context — Look at SGX Nifty, Dow Futures, Dollar Index, and India VIX to understand global and domestic sentiment before the Indian market opens.
2. Avoid the first 15 minutes — Opening moves are often volatile and unpredictable due to overnight positions being squared off.
3. Avoid trading near news events — RBI, Fed decisions, or big data releases can cause sudden sharp moves.
4. Avoid near-weekly expiry — Expiry days have high volatility and time decay; safer expiries give better stability.
5. Trade liquid strikes only — Stick to ATM or 1–2 ITM/OTM where volume is high; illiquid contracts have wide spreads and poor exit chances.
6. Check higher timeframe trend — A 3m or 5m trend gives better context for 1m entries, ensuring you trade with the bigger move.

B. Entry Rules

Entry should be disciplined and rule-based.

1. PCR bias — Put-Call Ratio shows market positioning; avoid going against the dominant side.
2. EMA 50/200 rule — If price is above both, market is bullish (favor Calls); if below, bearish (favor Puts).
3. Use CPR zones — Central Pivot Range helps identify supports/resistances; strong moves often come near S3–S4 or R3–R4.
4. Round numbers matter — Levels like Nifty 20,000 act as psychological support/resistance.
5. Bollinger Bands — Price touching bands often signals reversal or breakout.
6. RSI at extremes — Below 30 suggests oversold (buy zone), above 70 suggests overbought (sell zone).
7. Volume & OI check — High activity confirms genuine moves; low activity signals traps.
8. Reconfirm order — Always double-check direction before execution to avoid mistakes.

C. During Trade

Managing an open trade is as important as entry.

1. Exit if stagnant — If price doesn’t move in 15–20 minutes, exit to avoid stuck trades.
2. Cut losses early — Don’t hold onto losing trades hoping for reversal.
3. Don’t chase trades — If missed, wait for next; chasing usually ends in bad entries.
4. Avoid last 30 minutes — Unless trend is very strong, volatility in closing hour is risky.
5. Book partial profits — In strong trends, take some profit and trail SL to ride further.

D. Exit & Profit Booking

1. Always plan target & SL — A trade without plan is gambling; define risk and reward first.
2. Fix max trades per day — Example: 3 trades; stops you from overtrading or revenge trading.

E. Risk Control

Protecting capital is the top priority.

1. No averaging losses — Adding more to a bad trade increases risk.
2. Daily loss limit — Decide % or fixed amount (e.g., 2% of capital or ₹2000).
3. Soft & hard limits — Stop normal trades at soft limit; stop all activity at hard limit.
4. Take a break — If hard loss hits, skip next day; helps reset psychology.
5. Weekly review — Study trades, note mistakes, and update rules for improvement.