Nifty - Option Buying Using Simple Moving averages!

Like this Article? Share it with your friends!

Options can be traded using Simple Moving average and by adding the element of Time along with it.

We are showing 15 minutes chart of Nifty 17300 call option of Nifty along with two different averages of 30 days and 60 days.

Nifty 17300 Options chart: 15 minutes

Trade Setup – The above chart shows that whenever the option price moves above the moving average and forms higher highs higher lows it provides an opportunity to go long. This can be observed on multiple occasions as highlighted.

At each of these highlighted areas we can see there is a contraction between the two averages followed by an expansion along with prices forming higher highs and higher lows. Ensure that every single condition mentioned in the previous statement is followed.

Time element: Option buyer makes money hardly 20% of the times. So it is important that the buyers enter when the time is also right. By adding the Time cycle concept one can increase the conviction sharply.

In a nutshell, one can trade using simple concept of Moving average directly on price but remember to add the ingredient of Time for better conviction trade setup.

Learn to Trade Options in upcoming OTTA program – Options Trading Using Technical analysis focuses on Candlesticks, Volume profile, Options Trading, Trade setup using Bollinger Bands and much more. Be a part of this Elite group of Option Traders. Limited seats only, know more here