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Recommended Strategy

🎯 Supertrend (10,3) + VWAP

Directional Option Buying Scalp – Nifty Weekly Options • 1 Lot • ₹1L Capital

📡 Forward Test Simulator

Live Signal Monitor

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Nifty Price
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VWAP
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Supertrend
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ATR(10)
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⬤ NO SIGNAL
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Signal active. Enter the current ATM option premium to start tracking.

📋 Sim Trade Log

Date Type Entry ₹ Exit ₹ P&L ₹ P&L % Exit Reason
No sim trades yet. Enter the first one above.

💡 Why This Setup?

✓
Most-used Nifty option scalp in the Indian retail community (2025–2026)
Used by thousands of Zerodha traders daily. Extensively covered on TradingQ&A, YouTube, and trading blogs as the go-to setup for Nifty weekly option buying. Positive expectancy backtested by the community with 1% risk per trade.

Works in all VIX regimes

📉 Low VIX (12–18)

Supertrend stays flat → very few signals generated. Avoids choppy, low-momentum days automatically. Capital stays protected.

📈 High VIX (22+)

Wider ATR bands catch big directional moves. Exactly the environment for large premium gains like ₹202 → ₹222 scalps. More signals, bigger targets.

⚙️ Setup Parameters

Parameter Value Notes
Timeframe 5-minute Nifty spot chart
Indicator 1 — Supertrend ATR(10), Multiplier 3 Standard & most-used settings
Indicator 2 — VWAP Daily VWAP All-weather trend filter
Instrument Nifty Weekly Options Current week expiry
Strike selection ATM or 50-pt OTM Delta ≈ 0.4 – 0.5
Max premium per lot ≤ ₹18,000 65 qty × ₹277 = ₹18,000. Skip if higher.
Capital ₹1,00,000 1% risk = ₹1,000 per trade
Lot size 1 lot (65 qty) Non-negotiable — no scaling until profitable
Entry window After 9:30 AM Wait for first candle close
Latest entry Before 2:00 PM Skip signals after 2:00 PM
Hard time exit 2:45 PM No overnight. Square off no matter what.

🚦 Entry Rules

📈 BUY ATM CE  (Bullish Signal)

  • 5m candle closes above Supertrend line
  • Nifty spot price above VWAP
  • Both conditions on the same 5m candle
  • Buy nearest ATM CE or 50-pt OTM CE
  • Premium ≤ ₹18,000 / lot

📉 BUY ATM PE  (Bearish Signal)

  • 5m candle closes below Supertrend line
  • Nifty spot price below VWAP
  • Both conditions on the same 5m candle
  • Buy nearest ATM PE or 50-pt OTM PE
  • Premium ≤ ₹18,000 / lot
Strike: ATM strike or 50 points OTM (whichever keeps premium under ₹18,000). On high-VIX days ATM is fine; on low-VIX days buy 1 strike OTM to reduce theta burn. Always use the current week expiry (highest liquidity).

🛡️ Risk Management & Trailing SL

1
Max Risk Per Trade: 1% of Capital (~₹1,000)
With ₹1L capital this is ~₹1,000. At 1 lot (65 qty), initial SL = 40% drop from entry premium. E.g. entry at ₹100 → SL at ₹60. Never risk more than this per trade, regardless of conviction.
2
Initial Stop Loss: 40% Drop from Entry Premium
Wider on high-VIX days (ATR is bigger, premium naturally swings more). The same 40% rule works for both low and high VIX because the premium size auto-scales with VIX. Place SL immediately on entry — no exceptions.
3
Trail 1 — Breakeven: When Premium +25%
As soon as premium rises +25% from entry, move SL up to breakeven (entry price). E.g. entered at ₹100, premium reaches ₹125 → move SL to ₹100. Capital is now fully protected. Let the trade run.
4
Trail 2 — Lock 50% of Open Profit
After breakeven is locked: every ₹1 the premium gains, trail SL up by ₹0.50. This locks 50% of all further gains.
Example: Entry ₹100, reached ₹150 (₹50 profit). SL = ₹100 + (₹50 × 50%) = ₹125. Premium reaches ₹200 → SL = ₹100 + (₹100 × 50%) = ₹150.
5
Hard Underlying Exit: Supertrend Flip
If Nifty spot price crosses back through the Supertrend line in the opposite direction (regardless of premium SL level), exit immediately at market. Do not wait for SL to be hit if the signal has already reversed.

Premium Trailing SL Ladder

Premium Level Action SL moves to
Entry (₹100 example) Place initial SL ₹60 (–40%)
+25% → ₹125 Trail 1: Move to breakeven ₹100 (breakeven)
+50% → ₹150 Trail 2 kicks in: lock 50% ₹125 (+25% locked)
+80% → ₹180 Continue locking 50% ₹140 (+40% locked)
+100% → ₹200 Continue locking 50% ₹150 (+50% locked)

🎯 Profit Targets (Scalping Style)

Quick Book
+20–30%
₹1,000–2,000 profit
on 1 lot. Always valid.
Partial Book
+30%
Book 50% at +30%,
trail the rest.
Let It Run
+50–80%
Strong momentum days.
Trail SL until stopped out.
Recommended approach: Book 50% at +30% to lock ₹975 profit per lot (65 × entry × 30% / 2). Move SL on remaining 50% to breakeven and let it run with Trail 2 active. This way the worst outcome after partial booking is breakeven on the full trade.

🚫 Filters & Safety Guards

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No Trade on Event Days
Skip all trades on: RBI MPC announcement days, FOMC days, Union Budget day, SEBI policy days, Nifty special rebalancing days. Options pricing is chaotic before and after these events — IV crush or spike can override any technical signal.
!
Max 2–3 Trades Per Day
Stop after 2 losses in a day — market is not in a trending mode. Do not trade for revenge. If 2 trades have both hit the initial SL, the session is done.
!
No New Entries After 2:00 PM
Late-day signals have low follow-through and high spread/impact cost. Any signal after 2:00 PM is ignored entirely. All open positions must be closed by 2:45 PM hard — no overnight option carry.
✓
Both Conditions Must Trigger Together
Supertrend flip alone is not enough. VWAP confirmation is mandatory. If Supertrend is bullish but price is still below VWAP — wait. If price is above VWAP but Supertrend has not flipped — wait. Both must align on the same 5m candle close.
✓
One Lot Only Until Consistently Profitable
Discipline over size. 1 lot = 65 qty. Do not increase to 2 lots until 20+ trades have been executed with positive expectancy. Risk per trade stays at 1% of capital regardless of lot size changes.

✅ Pre-Trade Checklist