Market Condition Filters

Trade only when these market conditions align:

• Clear Trend Present - Index showing defined direction (up, down, or range-bound). Use 20 and 50 EMA on 15-minute chart: trending when EMAs clearly separated, avoid when intertwined
• Adequate Volatility - India VIX above 12 for Nifty/Bank Nifty, or VIX above 15 for US indices. Low volatility means insufficient movement for intraday profits
• Normal Trading Hours - First 30 minutes (9:15-9:45 AM IST) often choppy; best trading window is 9:45 AM - 2:30 PM IST for Indian indices
• No Major Event Overlap - Avoid trading during Fed announcements, RBI policy meetings, monthly expiry first hour, or major economic data releases unless specifically trading the event

Technical Setup Requirements

Enter trades only when you see:

• Confirmation on Multiple Timeframes - Check 5-min, 15-min, and 1-hour charts. Direction should align across at least two timeframes
• Support/Resistance Clarity - Price near a clear S/R level with room to move. Minimum 50-100 points potential move for Nifty, 100-200 for Bank Nifty
• Volume Confirmation - Above-average volume on breakout/breakdown. For indices, look for 20% above average volume in the direction of trade
• Momentum Indicators Aligned - RSI not in extreme zones (between 40-60 for range, above 60 for uptrend, below 40 for downtrend). MACD showing momentum in trade direction

Personal Readiness Checklist

Your mental and physical state matters:

• Well-Rested - Minimum 6 hours sleep, alert and focused
• Emotionally Neutral - No recent major wins or losses affecting judgment
• Time Available - Minimum 2-hour block to monitor trades without interruption
• Risk Capital Only - Trading with money you can afford to lose, not bill money or borrowed funds
• Daily Plan Prepared - Key levels identified, targets set, stop losses determined before market open

Optimal Trading Days

Certain days offer better probability:

• Tuesday through Thursday - Generally best trending days with good follow-through
• First Week of Month - Fresh positions, better institutional participation
• Days After Strong Overnight Moves - Often see continuation or clear reversal patterns
• Avoid: Mondays - Weekend gap often leads to choppy, unpredictable action in first half
• Avoid: Monthly Expiry Day - Extreme volatility and manipulation make consistent profits difficult

Market Condition Red Flags

Stay out of the market when:

• Choppy, Sideways Action - Price whipsawing within narrow range. 20 and 50 EMA crossing back and forth
• Extremely Low Volatility - India VIX below 10 or VIX below 12. Insufficient movement to cover transaction costs
• Extremely High Volatility - India VIX above 30 or VIX above 35. Stop losses get hit too easily, risk management becomes impossible
• Gap Opening Without Follow-Through - Large gap up or down that immediately reverses. Wait for direction confirmation
• Holiday-Shortened Weeks - Low participation, unpredictable moves

Event-Based Avoidance

Never trade during:

• Central Bank Meetings - RBI policy, Fed meetings (FOMC). Wait for dust to settle, trade the next day
• Major Economic Data - US Non-Farm Payroll, India GDP, inflation data. Avoid 30 minutes before and after
• Earnings Season Peak - First week of quarterly results when individual stocks heavily impact indices
• Geopolitical Uncertainty - War escalations, political instability. Markets become news-driven and irrational
• Monthly/Weekly Expiry Time Decay - Last 30 minutes of expiry day dominated by large players, not retail-friendly

Personal Red Flags

Do not trade when you are:

• On a Losing Streak - Three consecutive losing days requires mandatory break. Reassess strategy before returning
• Overconfident After Big Win - Emotional high leads to oversizing and careless entries
• Distracted or Multitasking - Unable to monitor charts continuously. Index moves happen fast
• Sick or Sleep-Deprived - Cognitive function impaired, reaction time slow
• Violating Your Rules - If you skipped pre-market analysis, don't trade. Discipline failure compounds
• Reached Daily Loss Limit - Stop for the day at 1-2% account loss. Tomorrow is another day

Technical Red Flags

Avoid entries when:

• No Clear Support/Resistance - Price in "no-man's land" with no nearby reference levels
• Conflicting Timeframes - 15-min says up, 1-hour says down. Wait for alignment
• Low Volume Breakouts - Price breaks level but volume is below average. Likely false breakout
• Late-Day Setups - After 2:30 PM IST, volatility drops and ranges compress. Risk/reward poor

Use this systematic filter before every trade entry. All criteria must be YES before placing order.

Pre-Market Filter (Before 9:15 AM IST)

Criteria	YES/NO
Identified 3-5 key support and resistance levels for the day	☐
Checked overnight global markets (US, Asia) for direction	☐
Reviewed previous day's high, low, and close levels	☐
Noted any scheduled economic events or announcements today	☐
Set maximum loss limit for the day (1-2% of capital)	☐
Mentally prepared, well-rested, and focused	☐

Entry Filter (Before Placing Trade)

Criteria	YES/NO
Market is between 9:45 AM and 2:30 PM IST	☐
India VIX is between 12-30 (or VIX 15-35 for US indices)	☐
Clear trend visible on 15-minute chart (20/50 EMA separated)	☐
Entry point is near support (for long) or resistance (for short)	☐
Stop loss clearly defined and risk is 1% or less of capital	☐
Target is at least 2x the stop loss distance (2:1 reward-risk)	☐
Volume is above average in the direction of trade	☐
RSI is not in extreme zone (not below 30 or above 70)	☐
No major news event in next 30 minutes	☐
15-min and 1-hour charts show same direction	☐

Position Sizing Filter

Criteria	YES/NO
Position size keeps risk at maximum 1% of total capital	☐
Not risking more than Rs 500-1000 per lot (adjust to your capital)	☐
Total open positions do not exceed 3 trades simultaneously	☐
Not adding to losing position (no averaging down)	☐
Not over-leveraging (using more than 3x margin)	☐

Exit Filter (During Trade)

Criteria	Action
Stop loss hit	Exit immediately, no hesitation
Target achieved	Book 50-75%, trail stop on rest
Trade setup invalidated (trendline broken, volume drying)	Exit at breakeven or small loss
Major unexpected news breaks	Exit and reassess
2:45 PM IST reached and position not clearly profitable	Exit before 3:00 PM

Morning Routine (8:30 AM - 9:15 AM IST)

1. Review overnight US markets (S&P 500, NASDAQ close)
2. Check Asian market sentiment (Nifty futures, Hang Seng)
3. Identify 3-5 key support/resistance levels for Nifty/Bank Nifty
4. Note scheduled events (check economic calendar)
5. Set daily loss limit and maximum trades (typically 2-3)
6. Mental preparation: visualize following your rules

First 30 Minutes (9:15 AM - 9:45 AM IST)

1. Observe opening range - do NOT trade yet
2. Note high and low of first 15-minute candle
3. Watch volume patterns and volatility
4. Let market establish direction
5. Update levels based on opening price action

Active Trading Window (9:45 AM - 2:30 PM IST)

1. Execute trades only when all filters pass
2. Monitor open positions continuously
3. Trail stop losses on profitable trades
4. Take partial profits at first target
5. Stay disciplined - follow the checklist every time
6. Maximum 2-3 trades in this window

Wind Down (2:30 PM - 3:30 PM IST)

1. Close all positions by 3:00 PM (avoid last 30 minutes)
2. Do NOT take new positions after 2:30 PM
3. Journal the day: what worked, what didn't
4. Calculate P&L and update trading log
5. Review adherence to checklist (honest self-assessment)

Capital Allocation

• Never risk more than 1-2% of total capital on a single trade
• Keep 30-40% cash reserve for high-probability setups
• Do not use full margin - use maximum 30-50% of available leverage

Stop Loss Discipline

• Set stop loss BEFORE entering trade, not after
• Stop loss should be just beyond recent swing high/low (5-10 points buffer)
• Never widen stop loss once trade is active
• If stopped out twice on same setup, do not re-enter that day

Daily Loss Limits

• Stop trading for the day after losing 1-2% of capital
• After three consecutive losing trades, stop regardless of rupee amount
• Take mandatory 2-day break after three consecutive losing days
• Review and adjust strategy during break, do not trade emotionally

Target Management

• Minimum reward-to-risk ratio of 2:1 (if risking 50 points, target 100 points)
• Book 50% profits at first target, trail stop on remaining
• Move stop to breakeven once trade is 1:1 (profit equals initial risk)
• Do not get greedy - planned targets exist for a reason

How to Identify Daily Levels

• Previous Day High/Low - Most respected intraday levels
• Previous Day Close - Acts as pivot, support in uptrend, resistance in downtrend
• Round Numbers - Nifty 22000, 22500, Bank Nifty 48000, etc. Psychological levels
• Opening Range - High and low of first 15 minutes
• VWAP - Volume-weighted average price on daily chart

Weekly and Monthly Levels

• Previous week high/low for swing reference
• Monthly open level (first trading day of month)
• All-time high or recent major highs
• Use these for broader context, not intraday entries

1. Trading the First 15 Minutes - Wait for opening volatility to settle
2. Overtrading - More trades do not equal more profit. Quality over quantity
3. Ignoring Your Checklist - Discipline breakdown is the fastest path to losses
4. Revenge Trading - Taking aggressive trades to recover losses compounds the problem
5. Moving Stop Losses - If you widen your stop, you are hoping, not trading
6. Trading Without Stop Loss - This is gambling, not trading
7. Checking P&L Too Often - Focus on process, not rupees. Check at end of day
8. Following Tips and Rumors - Trade your plan, not someone else's opinion

Every weekend, review your trading week:

• Win Rate - What percentage of trades were profitable? (Target: 50-60%)
• Average Win vs Average Loss - Winners should be 2-3x bigger than losers
• Checklist Adherence - Did you follow your filters? Rate yourself 1-10
• Best Trades - What worked? Can you replicate this setup?
• Worst Trades - What failed? Was it market or discipline breakdown?
• Emotional State - Did you trade emotionally? When and why?

Track these metrics in a trading journal. Patterns will emerge that help you refine your edge.