Benefits of trading in INTRADAY NIFTY FUTURE or Why trade in INTRADAY NIFTY FUTURE?
- Nifty future is by far the largest traded instrument/product on the NSE (after nifty options)
- Nifty future is the broadest index and now also overcoming the dominance of Sensex (BSE’s benchmark index which ruled as India’s benchmark stock market index) as the market driver and market mirror. Thus, trading in nifty future is trading in Indian equity market benchmark index. Moreover nifty is broader than Sensex in a sense that it has 50 stocks compared to 30 stocks in Sensex. (Notably only recently in November 2011, the Sensex futures, which were launched more than a year ago, started attracting liquidity and volumes in excess of 500 crores a day; which is however very scant compared to nifty futures daily volume)
- Nifty future gives move of both sides i.e. up and down which gives any trader gap and time to enter and exit in profit and loss unlike in stocks. In stocks intraday both-side trade is nearly not possible. Either you buy-n-trade or sell-b-trade. You have to be either bull or bear in intraday stock trading. In intraday nifty future trading you can act as both bull and bear in same day by putting buy and sale both trades as you deem fit in your trigger level analysis.
- Brokerage is also relatively lower in intraday nifty future than nifty options, or stock intraday. Many stock brokers provide fixed brokerage for unlimited volume while many stock brokers provide fixed charge on per lot basis also as done in nifty future.
- Positional or overnight trades in nifty future is highly risky in times of high volatility and uncertainty and high international markets impact scenario which is prevailing at present. You can buy nifty future today and hold for next day or two, but any overnight news/event can make nifty crash the next day opening by 1-2% or even more (which has happened more times than less) giving you loss of 50-100 points straight away (considering that nifty future is priced at 5000) Now at 5000 and higher levels of nifty the cuts will also be higher, in as sense that when nifty future was 3000-4000 it was lesser risky as 2% overnight loss costed 30-40 points while now with increasing size of nifty become larger. Thus, it is better and more profitable to trade in nifty intraday than overnight.
- You can sleep well when you have all positions squared up in nifty intraday only and no nifty position is open. In stocks, all stocks will not go down if market go down next day and all stocks don’t go up if market go up next day. Meaning thereby, that in stock overnight position you have headway in terms of technical analysis, hedging and so on, but in nifty future overnight position you are completely worried about the sentiment-changes before, till and at time when markets open the next day. Thus, intraday trading in nifty is again better than overnight trading in nifty.
- You will get higher leverage/exposure in less deposit/margin money for trading in intraday nifty. The broker normally knows that in nifty future strictly intraday trading you are not going to lose ‘fortunes’ in one or two trades !(especially when your advisor is TRADE+ASSURE .com, who gives only and only 10 point SL no matter what). So most traders can trade in 2 big lost with only as low as 10,000 rupees margin/deposit with their brokers. The trader also happy and the broker also happy. (One of our client in Karnataka trades 4 big lots and has put only Rs.5000 as deposit! You must want his contact number!)
- Many (novice/immature/non-smart) people argue that you trade in nifty future or intraday, then you give your broker a lot of rupees as brokerage. They also tell that you should earn more and not your broker…and bla blab la! These type of stock market guys live with ‘frugal mentality’. (Traders want smartness-mentality and not frugal mentality )They care more about the bath-tub than the baby. They care more about the fuel charge than the Mercedes! Are you getting the point na? These people just try to show themselves as smart by talking like this because they are not actually smart! They do not have the knowledge, technique and courage to be smart in actual. So they say things ‘you should earn more, and not your broker’ and stuff like that. In actual, one should focus on purely your trading success and profits & NOT ‘how to give less and less brokerage to my stock broker’. Yes, we emphasize in cutting a good deal and getting the best lowest brokerage from your broker. But that is only a functional thing and nothing to do with your profitable trading. (in fact, we ourselves educate traders/our customers to manage their brokerage account by regularly taking payouts, keeping good relations with their brokers, and also we have helped our customers to cut good low brokerage deals with their brokerages by teaching/helping them how to do it-in some cases we have ourselves directly talked with our customers’ brokers/dealers and acted in all the ways we can for the benefit of the customer.) Apply simple logic, you are putting one to two overnight trades in nifty future and saving 100-200 rupees on brokerage, but aren’t you taking 10-20 times more risk than what you could have in intraday? Yes, you could have lost 10 or 20 or 30 points in intraday but you can lose 100 or more points in overnight nifty future trading. Yes, in our strategy when you put more (1 to 2-3 at max in a day, you may give 3-4 points to the broker in each trade, but your deposit margin is less, your brokerage is less, your stoploss is less, your risk is definitely lesser than overnight trades, and your profit-ration in all comparison is very good when our trades are right (at 20 or 40 points in each trade). Final thing, your peace of mind, too is high! The bottom-line is do a low brokerage deal with your broker but don’t let your trading strategy at all dependent on ‘your broker should not earn more’. After all that’s what they are in the business, brokerage. So, you understood this benefit of intraday nifty future trading also.
- As said ahead, nifty future is the benchmark, and largest volume trading instrument. Thus, it is traded from all range of market participants from a small retail trader 10,000 deposit, in small village to big FII sitting in Mauritius with million dollars. The point is that while trading with nifty future, you also get to get the feeling that you are trading in ‘the main market’ and with the ‘big traders’ as well as ‘small ones’.
- Such a high liquidity and broad range of market participant along with it having be the market benchmark index; it is impossible to manipulate/rig the movement of nifty which is done in many stocks.
- Given all the above arguments, it is very apparent and clear that if you are a new/fresh trader you should select nifty future intraday as your beginning, rather than straight away drifting in stocks, especially when you are a small trader. If you are an old and experienced trader (please mind many people take word ‘experienced as synonym for ‘smart/skillful’ which is not so, you understand it) then you should trade in nifty future intraday to get the feel of being live with the market and remain in touch of market moves.
- We and our many customers have experienced that they get to get feeling and experience of -1. Removal of fear of loss, 2. Increase in Confidence, 3. Sense of Maturity, 4.Rise in Patience, 5. Tendency of increase and ease of Calculations/Calculative mind, and such other benefits of trading with us in intraday nifty future.