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Tuesday 7 October 2014

Why Nifty Futures?

There are certain advantages in trading futures especially the index futures. Future contracts of the NSE Nifty index is the most liquid futures contract traded in India.

  If you are a day trader, it is always better to stick to a single instrument and timeframe. Every contract will have its own character and behave in the same fashion. Tactics suitable for a particular contract may not work well on something else. Future markets are always dominated by professional traders and most of them are very short term day traders. These traders are habitual traders and with some experience we will be able to anticipate their behavior more or less accurately.

The beauty of the future market is that no body can exit and windup their position without creating an order against their own position. So every new order creates an opposite future order. When a big enough group of traders realize they are wrong, their own exit triggers an explosive move in the opposite direction. This behavior makes the futures market ideal for short term day trading.

              Being a very liquid market, we can always enter and exit very easily. Slippages are very rare in Nifty Futures. Most of the times we will get a right fill for our orders. Stock futures barring a few are very liquid.

         Price moves in a stock and stock futures are greatly influenced by the sector move and the broad market move. It is very difficult for a stock to move against the sector and overall market. If you are trading a stock future you may need to monitor what the sector and broad market is doing. By trading the broad market index we can avoid this.

            Stock prices are always influenced by other factors like cross exchange arbitrage commodity prices and exchange rates. These factors have negligible impact on Nifty Futures.

I think, as far as day trading is concerned Nifty Futures current month contracts are the ideal instrument to trade.


Parag Patil is a technical analyst and trading system designer with stock excel programmer. I hope the articles and live chart of nse future and mcx on this Website will be as helpful and profitable to you . I try to update and post new articles tips everyday. My motto is to encourage the traders, so that they should able to understand the technique views behind the moment of stocks. I have deeply analyzed with many technical indicator with parameter and added to my amibroker afl. And even taken backtest report which is never being implemented. Any of the analyst expect me. Seeing all this you may understand that my views is more technical than commercial. If you are profited by my views I fill happy.

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