A Sure Shot Strategy for Setting Targets with Open High/Low Concept

 A Sure Shot Strategy for Setting Targets with Open High/Low Concept

Hello everyone!

In today’s blog, I’m going to share a foolproof strategy for setting targets when trading on 5-minute and 15-minute charts, especially on days when there’s a higher possibility of profit. This strategy involves analyzing market conditions from the previous day and applying the open-high/open-low concept. It’s critical that you follow these steps exactly as I explain them—don’t overthink or add extra factors; stick to the plan for the best results.

Step 1: Check the Previous Day’s Candle

Before you begin trading, the first thing you need to do is check the previous day's candle. This step is essential for setting the foundation for your strategy.

• If the previous day’s candle is red, then you’ll work with the Open Low strategy the following day.
• If the previous day’s candle is green, then you’ll work with the Open High strategy the next day.

Now, remember, the idea is to only use the setup I explain without thinking too much or changing the rules. Stay disciplined.

Step 2: Analyze the First 10-Minute Candle of Nifty

The next step is to evaluate the first 10-minute candle of Nifty on the day you’re trading.

• If the first 10-minute candle of Nifty is green, you’ll work with both the Open Low and Open High setups. This gives you more flexibility because if the price is rising, you could take advantage of either the long or short side.

• If the first 10-minute candle of Nifty is red, stick only to the Open High setup for your trades. This will guide you toward shorting the market when it’s moving downward.

Step 3: Wait for the Execution Signal

Here’s where you need to be careful. When trading, it’s not just about getting into a trade but waiting for the right entry.

If the first 10-minute candle shows a movement of 3% to 5%, IGNORE it. It might be a trap. Such big price movements in the first candle could signify an impulsive move rather than a sustainable trend. So, if you see that much movement, just stay out.

But if the movement isn’t that extreme, then go ahead and place your trade:

• If the first candle is green, set up a buying position at the second candle and place your stop-loss below that second candle.
• If the first candle is red, work with the Open High strategy and adjust your positions accordingly.

Step 4: Setting the Stop-Loss and Target

Your stop-loss strategy is critical in managing risk.

• On the buying side, your stop-loss should be 1.5% below your entry point. I recommend setting this stop-loss at no more than 1.5% to manage your risk effectively.

Now, for the target setting:

• If you are trading on a 5-minute chart, use the 13 EMA as your target level.
• On the 15-minute chart, use the 13 EMA as well.

You don’t exit your position until two consecutive candles close below the 13 EMA. This helps to avoid premature exits and lock in profits as the market continues to trend in your favor.

Step 5: Trailing Stop-Loss for Maximum Profits

If the market is moving in your favor, trail your stop-loss. On a 5-minute chart, use the 13 SMA for trailing your stop, while on the 15-minute chart, use the 8 SMA.

• Wait for two consecutive candles to close below the SMA before exiting your position.

This method ensures you capture as much of the move as possible while minimizing risk as the market fluctuates.

Step 6: Handling Open High/Low in the Second Candle

Sometimes, you may not get the exact open-high/open-low signal in the first candle, but it will show up in the second candle. In this case, forget about the first candle and treat the second one as the starting point.

• On the second candle, look for the open-high/open-low setups, and again, use the stop-loss and target methods I explained earlier.

Important Reminder: Ignore 3%-5% Moves in the First Candle

Always remember, if you notice a movement of 3% to 5% in the first candle, ignore it. This kind of movement could be a false breakout, and trying to trade such moves can lead to losses.

Final Thoughts

This setup is a systematic approach to help you make better trading decisions. By following the open-high/open-low strategy, paying attention to Nifty’s first 10-minute candle, and using trailing stop-loss and EMA levels, you’ll be able to improve your chances of success.