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Full Quant Strategy Nifty Sensex

The document outlines various profitable quantitative trading strategies for option buying in the Indian markets (Nifty/Sensex), including VWAP, ADX, Renko, and Heikin Ashi strategies, each with specific entry/exit rules and risk management practices. It emphasizes the importance of discipline and risk management, recommending practices such as limiting capital risk and avoiding overtrading. Additionally, it highlights the use of public scripts on TradingView and the potential for automation using Pine Script.

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shetty.lokesh
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852 views2 pages

Full Quant Strategy Nifty Sensex

The document outlines various profitable quantitative trading strategies for option buying in the Indian markets (Nifty/Sensex), including VWAP, ADX, Renko, and Heikin Ashi strategies, each with specific entry/exit rules and risk management practices. It emphasizes the importance of discipline and risk management, recommending practices such as limiting capital risk and avoiding overtrading. Additionally, it highlights the use of public scripts on TradingView and the potential for automation using Pine Script.

Uploaded by

shetty.lokesh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

Profitable Quant-Based Option Buying Strategies (Nifty/Sensex)

Profitable Quant-Based Option Buying Strategies (Nifty/Sensex)

In the Indian markets (Nifty & Sensex), several quantitative trading systems have proven effective

for intraday and swing option buying. Below we detail some well-known strategies - each leveraging

popular indicators like VWAP, ADX, Renko, Heikin Ashi, etc. - along with entry/exit rules, risk

management practices, and evidence of performance. A comparison table is provided at the end for

quick reference.

1. VWAP Pullback & Breakout Strategy (Intraday)

VWAP (Volume-Weighted Average Price) serves as a dynamic intraday benchmark. A trade setup involves

entering long when the price pulls back to VWAP in an uptrend and confirms a bounce. Breakouts above

VWAP after consolidation also offer entries. Exit on target or if price recrosses VWAP. Typical R:R

~1:1.5. Works best on high-volume trend days.

2. ADX Trend Strength Strategy

The ADX indicator filters trades by trend strength. Entry when ADX > 25 and +DI > -DI (buy call), or

vice versa (buy put). Exit on weakening ADX or DMI crossover. Low win-rate but high reward.

Emphasizes tight stop-loss and large winners. Effective in strong trend conditions.

3. Renko Breakout Strategy

Renko charts smooth out price action by using fixed brick sizes. Entry on color flip or breakout

beyond key Renko levels. Exit when the opposite color appears. Clean trend capture, particularly

useful for avoiding whipsaws. Often combined with oscillator or trend confirmation.

4. Heikin Ashi Trend Strategy

Heikin Ashi candles reduce noise and help identify trends. Buy when HA flips green after red and

vice versa for puts. Exit on opposite candle or trailing stop. Good for swing trading. Filters like

ADX or Supertrend improve reliability. Helps stay in trends longer.

5. Multi-Indicator Strategy (Supertrend + ADX + MACD/HA)

A robust setup combining Supertrend (fast/slow), ADX > 20, and Heikin Ashi or MACD for confirmation.

Entries only when all signals align. High win-rates (up to 70-80%) due to strong filtering. Stops on

Supertrend flip or momentum loss. Widely used in India with Pine Scripts.

6. Risk Management Best Practices

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Profitable Quant-Based Option Buying Strategies (Nifty/Sensex)

- Limit each trade to 1-2% capital risk.

- Use stop-losses based on option premium or underlying movement.

- Employ trailing stops and partial profit booking.

- Avoid overtrading; 1-3 trades/day max.

- Manage theta decay: exit stagnant trades quickly.

- Backtest extensively before deployment.

- Never average down on losing options.

These strategies, when executed with discipline, provide powerful edge for intraday and swing option

buying in Indian indices like Nifty and Sensex. Many are available via TradingView public scripts or

can be built using Pine Script for automation and alerts.

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